Earl and Mary form Crow Corporation. Earl transfers property, basis of $200,000 and value of $1,600,000, for 50 shares in Crow C
orporation. 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.
Answer: The correct answer is "c.Crow will have a business deduction of $120,000 for the value of the services Mary will render.".
Explanation: With respect to the transfers: Crow will have a business deduction of $120,000 for the value of the services Mary will render.
This is calculated by the difference between the value of the property contributed by Earl $1 600 000 and the value of the property contributed by Mary $1 480 000.
Affective stage is the most important stage for the market that helps in understanding the customer feeling that how much customer has been attached for a particular brand and from this the market always check that the customer requirement with some strong levels i.e. price, quantity, and quality, etc. for a particular product from which the customer has been attached since long.
