The Lack or Failure of Consideration Is a Personal Defense

question 21

True/False

The lack or failure of consideration is a personal defense and can be used to avoid payment to an ordinary holder, an HDC, and a holder through an HDC.

---

Definitions:

Gain Recognized

The profit realized from the sale of assets over its adjusted basis, which must be reported for tax purposes.

Like-kind Exchange Provisions

Tax regulations allowing the deferral of tax liability when business or investment properties are exchanged for similar properties.

Partnership Interest

An ownership share in a partnership that represents a partner's stake in the profits, losses, and assets of the partnership.

Like-kind Exchange

A tax deferment strategy allowing for the exchange of similar types of properties without the immediate tax implications of selling the property.