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German Associates, which manufactures plastic containers, recently sold 12,000 containers to RAW Incorporated. The selling price per container was $18. RAW paid for the containers
German Associates, which manufactures plastic containers, recently sold 12,000 containers to RAW Incorporated. The selling price per container was $18. RAW paid for the containers by transferring 864 shares of its common stock to German Associates. On date of payment, RAW stock was selling on Nasdaq at $250 per share. Compute German's tax basis in the RAW stock.
Multiple Choice - -0-.
- $216,000.
- Inger's tax basis equals its manufacturing cost of the 12,000 containers.
- None of these choices are correct.
German Associates, which manufactures plastic containers, recently sold 12,000 containers to RAW Incorporated. The selling price per container was $18. RAW paid for the containers by transferring 864 shares of its common stock to German Associates. On date of payment, RAW stock was selling on Nasdaq at $250 per share. Compute German's tax basis in the RAW stock.
Multiple Choice
- -0-.
- $216,000.
- Inger's tax basis equals its manufacturing cost of the 12,000 containers.
- None of these choices are correct.
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