Identify Which of the Following Statements Is True

question 32

Multiple Choice

Identify which of the following statements is true.

• A)The assignment of income doctrine requires a cash method of accounting for a transferor/shareholder to recognize income when accounts receivable are transferred by the shareholder to the corporation in a Sec. 351 exchange in which no gain is otherwise recognized.
• B)The assignment of income doctrine is a legislative requirement that income be taxed to the person who earns it.
• C)The assignment of income doctrine does not apply if the transferor in a Sec. 351 exchange in which no gain is otherwise recognized transfers when a sole proprietor transfers substantially all the assets and liabilities of the transferor's trade or business to a controlled corporation.
• D)All of the above are false.

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Definitions:

Price Differentials

The differences in the price of the same or similar products in different markets or geographical locations.

Cooperative Behavior

Actions taken by individuals or groups that are intended to benefit others or achieve a common goal, often involving collaboration and mutual support.

Finite Endpoints

Refers to the established minimum and maximum boundaries or limits within which a particular operation, function, or variable exists.

Pharmaceutical Company

A business entity focused on research, development, production, and marketing of medications and drugs for use in healthcare.