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 gain or income.
b. earl will recognize a gain of $1,400,000.
c. crow will have a business deduction of $120,000 for the value of the services mary will render.
d. crow corporation has a basis of $1,480,000 in the property it received from mary.
e. none of these choices are correct.
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Earl and mary form crow corporation. earl transfers property, basis of $200,000 and value of $1,600,...
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