Arnold Purchases a Building for $750,000 Which Is Going to Be

question 2

Multiple Choice

Arnold purchases a building for $750,000 which is going to be used by his wholly-owned corporation. Which of the following statements are correct?

• A)If Arnold contributes the building to the corporation, there will be no recognition under § 351 and a carryover basis of $750,000.
• B)If Arnold leases the building to the corporation, lease-rental payments of $30,000 per year to Arnold will result in a $30,000 deduction for the corporation.
• C)If Arnold leases the building to the corporation, lease-rental payments of $30,000 per year to Arnold will result in $30,000 of gross income for Arnold.
• D)Leasing the building to the corporation will contribute to the tax avoidance objective of minimizing double taxation.
• E)All of the above are correct.

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Definitions:

New Nationalism

A political ideology and reform proposal advocated by Theodore Roosevelt during the early 20th century, promoting a strong federal government to regulate the economy and address social issues.

Woodrow Wilson

The 28th President of the United States, serving from 1913 to 1921, known for his progressive reforms and leadership during World War I.

Federal Economic Policy

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Legislative Achievements

Refers to the successful enactment of laws or statutes by a legislative body, such as a parliament or congress, which often reflects the body's effectiveness or priorities.