Earl and mary form crow corporation. earl transfers property, basis of $200,000 and value of $1,600,000, for 50 shares in crow corporation. mary transfers property, basis of $80,000 and value of $1,480,000, and agrees to serve as manager of crow for one year; in return mary receives 50 shares of crow. the value of mary’s services is $120,000. with respect to the transfers:

a. mary will not recognize any gain or income.
b. mary will recognize gain or income of $120,000.
c. mary will recognize gain or income of $1,300,000.
d. mary will recognize gain or income of $1,420,000.

Which of the following statements is correct? large corporations are taxed more favorably than sole proprietorships. corporate stockholders are exposed to unlimited liability. due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of u. s. businesses (in terms of number of businesses) are organized as corporations. most businesses (by number and total dollar sales) are organized as partnerships or proprietorships because it is easier to set up and operate in one of these forms rather than as a corporation. however, if the business gets very large, it becomes advantageous to convert to a corporation, mainly because corporations have important tax advantages over proprietorships and partnerships. most business (measured by dollar sales) is conducted by corporations in spite of large corporations’ often less favorable tax treatment, due to legal considerations related to ownership transfers and limited liability.

Which of the following statements about cash basis accounting is true? a. it is more complicated than accrual basis accounting. b. the irs allows all types of corporations to use it. c. it follows gaap standards. d. it ensures the company always knows how much cash flow it has.

Four students are at an extracurricular activity fair at their high school and are trying to decide which clubs to join. some information about the students is listed in this chart: which describes which ctso each student should join?