Recognized gain-loss on exchange


Pursuant to a plan of corporate reorganization which qualified as an A reorganization, Lou received one share of stock of X Corporation worth $65 and cash of $20 in exchange for a share of stock in Y Corporation with a $95 basis to Lou. What is Lou's recognized gain or loss on this exchange?

A. 0.

B. $10 loss.

C. $10 gain.

D. $20 gain.

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Accounting Basics: Recognized gain-loss on exchange
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