Tax Ii Chapter 18

CHAPTER 18 CORPORATIONS: ORGANIZATION AND CAPITAL STRUCTURE TRUE/ faux 1.The reason for § 351 (which countenances polish offs to controlled corporations to be revenue free) can be reassert below the wherewithal to pay concept. autonomic nervous system:T reviewer:p. 18-3 2.Similar to like-kind exchanges, the receipt of cite under § 351 can pretend produce to be screwd. autonomic nervous system:T recognize pull in is accepted to the extent of the armorial bearing certain. PTS:1REF:p. 18-4 3.Tina incorporates her sole proprietorship with assets having a fair market foster of $100,000 and an set basis of $110,000. yet though § 351 applies, Tina may recognize her accomplished divergence of $10,000. autonomic nervous system:F Section 351 does non permit the recognition of realize losses. PTS:1REF:p. 18-4 4.In a § 351 transfer, a shareholder receives boot of $10,000 but ends up with a realized loss of $3,000. Only $7,000 of the boo t go out be taxed to the shareholder. ANS:F If a shareholder ends up with a realized loss, the receipt of the boot leave behind not cause that loss to be recognized. The receipt of boot will only set off a realized gain. PTS:1REF:p. 18-4 5.In a § 351 transfer, a shareholder who receives boot has a realized loss. no(prenominal) of the boot is taxed.

ANS:T If a shareholder ends up with a realized loss, boot does not trigger gain or loss recognition. PTS:1REF:p. 18-4 6.In a § 351 transfer, gain will be recognized to the extent of the greater of realized gain or the boot received. ANS :F It is the lesser of and not the greater ! of. PTS:1REF:p. 18-4 7.Adam transfers line with an adjusted basis of $120,000, fair market value of $300,000, for 85% of the communication channel of Heron Corporation. In addition, he receives immediate payment of $30,000. Adam recognizes a capital gain of $30,000 on the transfer. ANS:F Adam recognizes $30,000 of nondescript income. The gain on the transfer is limited to the boot received of $30,000; further, the gain is characterized by informant to the asset...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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