A Shareholder's Basis in Stock Received in a Sec

question 7

Multiple Choice

A shareholder's basis in stock received in a Sec. 351 transaction is

• A)increased by the gain recognized by the corporation.
• B)decreased by the gain recognized by the transferor.
• C)decreased by liabilities assumed by the corporation.
• D)increased by the FMV of boot received from the corporation.

---

Definitions:

Affiliation

The joining of people for mutual support; membership; a social motive for assuming leadership responsibility.

Achievement

Accomplishment of a task; fulfillment; a social motive for assuming leadership responsibility.

Motivating Force

The driving power or influence behind actions and behaviors aimed at achieving goals.

Employees

Individuals hired by an organization to perform specific duties in exchange for compensation.