Question
Celeste transferred 100 percent of her stock in Supply Chain Company to Marketing Corporation in a Type A merger. In exchange, she received stock in
Celeste transferred 100 percent of her stock in Supply Chain Company to Marketing Corporation in a Type A merger. In exchange, she received stock in Marketing with a fair market value of $593,000 plus $593,000 in cash. Celeste's tax basis in the Supply Chain stock was $1,480,000. What amount of loss does Celeste recognize in the exchange and what is her basis in the Marketing stock she receives?
Group of answer choices
$294,000 loss recognized and a basis in Marketing stock of $1,480,000
No loss recognized and a basis in Marketing stock of $1,480,000
$294,000 loss recognized and a basis in Marketing stock of $887,000
No loss recognized and a basis in Marketing stock of $887,000
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