Identify Which of the Following Statements Is True

question 50

Multiple Choice

Identify which of the following statements is true.

• A)The transferee corporation's acquisition or assumption of liabilities in excess of the total adjusted bases of the properties transferred by a transferor results in a gain recognition by the transferor.
• B)When a transferor exchanges a mortgaged property under Sec. 351 and the amount of the mortgage is greater than the transferor's basis in the property, the transferor's basis in the stock received will be equal to the basis the transferor had in the mortgaged property.
• C)When forming a corporation, the accounts payable of a transferor's business are not liabilities for gain computation purposes if the transferor's business uses the accrual method of accounting.
• D)All of the above are false.

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Definitions:

Phrenology

Phrenology is an outdated and discredited theory that suggested the bumps on the skull could predict mental traits and character.

Assumptions

Accepted facts or statements taken as true without proof, often serving as the foundation for further reasoning or argument.

ERP

Event-Related Potential; a measured brain response that is the direct result of a specific sensory, cognitive, or motor event.

Consciousness

A state of being aware of and able to think about one's own existence, sensations, thoughts, surroundings, and experiences.