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Andrej [43]
3 years ago
15

Axle Corporation acquires 100% of Drexel Corporation's stock from Drexel's shareholders for $500,000 cash. Drexel Corporation ha

s assets with a $600,000 adjusted basis and an $800,000 FMV. The assets are subject to $200,000 in liabilities. Drexel Corporation shareholders purchased their stock eight years ago for $300,000. Axle Corporation's basis in the Drexel Corporation stock isA) $800,000.B) $600,000.C) $500,000.D) $300,000.
Business
1 answer:
kotykmax [81]3 years ago
8 0

Answer:

C) $500,000

Explanation:

According to Section 1012, the basis for stock is the purchase cost of stock.

Axle Corporation's basis in the Drexel Corporation stock is $500,000 .

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