Identify Which of the Following Statements Is True

question 52

Multiple Choice

Identify which of the following statements is true.

• A) Only transfers to newly created corporations qualify for Sec. 351 treatment.
• B) If a shareholder receives stock with an FMV greater than the FMV of the property exchanged in a Sec. 351 transaction, the excess FMV may be considered a gift from one shareholder to another shareholder.
• C) To qualify for Sec. 351 treatment, control is defined as more than 50% ownership of the voting stock, and more than 50% of all other classes of stock.
• D) All of the above are false.

---

Definitions:

Settlor

The individual who creates a trust by legally transferring assets into it, setting the terms for its management and distribution.

Revoke

To take back or withdraw an offer, right, or privilege.

Resulting Trust

A trust implied by law when property is transferred under circumstances suggesting the transferor does not intend the recipient to have beneficial interest in the property.

Express Trust

A trust created either while the settlor is alive or by will.