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Martin Operates a Law Practice as a Sole Proprietorship Using

Question 26

Multiple Choice

Martin operates a law practice as a sole proprietorship using the cash method of accounting.Martin incorporates the law practice and transfers the following items to a new,solely owned corporation. Martin operates a law practice as a sole proprietorship using the cash method of accounting.Martin incorporates the law practice and transfers the following items to a new,solely owned corporation. Martin must recognize a gain of ________ and has a stock basis of ________: A) $0; $30,000 B) $0; $40,000 C) $20,000; $30,000 D) $20,000; $40,000 Martin must recognize a gain of ________ and has a stock basis of ________:


A) $0; $30,000
B) $0; $40,000
C) $20,000; $30,000
D) $20,000; $40,000

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