Multiple Choice Questions (1) Charles and Dennis jointly organize Company X. Charles transfers his property with a basis of $150 and a FMV of $200 to X in exchange for half of X's stock. Dennis transfers $150 in cash to X in exchange for the other half of X's stock. What will Charles and Dennis recognized as a gain in this transaction? a. Charles: 0, Dennis:150 b. Charles: 50, Dennis: 150 c. Charles: o, Dennis: 0 d. Charles:200, Dennis:150 (2) The client comes to you with the following fact pattern and asks for what type of entity they should set up. They want limited liability, a separate entity to do business with clients, and most importantly to them they want to only pay taxes when they actually receive cash. What type of entity should they set up? a. Corporation b. Trust c. Partnership d. All of the above (3) Corporation Powns Corporation S. Corporation Sis no longer needed and is liquidated into Corporation P. What is the result of this transaction? a. P has to recognize a gain or loss in the amount of the FMV of the assets liquidated into P. b. S has to recognize a gain or loss in the amount of the FMV of the assets liquidated into P. c. P and S will not recognize a gain or loss in the in the transaction. d. Since the business of S has terminated the shareholders of P will have to recognize a gain or loss