Evaluate the propriety of Cynthia actions

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Problem - Sculpture as a Capital Asset

Cynthia is a successful sculptor who created a work that is now worth $400,000 and has no tax basis. Cynthia forms a corporation and contributes the sculpture to it in exchange for the corporation's shares. Fourteen months later, she sells all the stock for $400,000. She wants to treat the sale of the stock as a long-term capital gain. Evaluate the propriety of Cynthia's actions.

Reference no: EM132660115

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