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Azure Corporation, a C corporation, had a long-term capital gain of $50,000 in the current year. The maximum amount of tax applicable to the capital gain is $7, 500 ($50,000 times 15%). a. True b. False Jane transfers property (basis of $180,000 and fair market value of $500,000) to Green Corporation for 80% of its stock (worth $425,000) and a long-term note (worth $75,000), executed by Green Corporation and made payable to Jane. As a result of the transfer: a. Jane recognizes no gain. b. Jane recognizes a gain of $75,000. c. Jane recognizes a gain of $270,000. d. Jane recognizes a gain of $320,000. e. None of the above. Wade and Paul form Swan Corporation with the following investments. Wade transfers machinery (basis of $40,000 and fair market value of$100,000), while Paul transfers land of $20,000 and fair market value of $90,000) and services rendered (worth $10,000) in to the organizing the corporation. Each is issued 25 shares in Swan Corporation. With respect to the transfers: a. Wade has no recognized gain; Paul recognizes income/gain of $80,000. b. Neither Wade nor Paul has recognized gain or income on the transfers. c. Swan Corporation has a basis of $30,000 in the land transferred by Paul. d. Paul has a basis of $30,000 in the 25 shares he acquires in Swan e. None of the above

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