In 20Y1, Ms

question 20

Multiple Choice

In 20Y1, Ms. Graves transferred appreciated property to KL Partnership in exchange for an ownership interest in the partnership. She deliberately waited until 20Y3 before taking cash out of the partnership. Ms. Graves may have been trying to prevent the IRS from applying the:

• A) Business purpose doctrine
• B) Economic substance doctrine
• C) Substance over form doctrine
• D) Step transaction doctrine

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Definitions:

Polarization

The process in which opinions and attitudes become more extreme, often leading to increased division within groups or societies.

Indexing

Avoiding generalizations by using statements that separate one situation, person, or example from another.

Arbitrary

Refers to decisions or actions not based on system or rules but rather on personal discretion or random choice.

Context Bound

Referring to communication or behavior that is heavily influenced by its surrounding circumstances, environment, or cultural setting.