Which of the Statements Is Inaccurate Regarding Requirements for Nonrecognition

question 1076

Multiple Choice

Which of the statements is inaccurate regarding requirements for nonrecognition of gain or loss upon the transfer of assets to a corporation in exchange for stock?

• A) The transferor- shareholders must be in control (80%) of the corporation immediately after the exchange.
• B) Depreciation recapture applies to a transfer which falls under Sec. 351.
• C) Property must be transferred to the corporation solely in exchange for stock of the corporation.
• D) If property or money is received by the transferor, gain (but not loss) is recognized to the extent of the lesser of the boot received or the realized gain.

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Definitions:

Medical Services

Services provided by professionals in the healthcare sector, aimed at maintaining or improving individuals' health.

Oral Contract

An agreement that is made verbally and not committed to a written document, though still legally binding under many jurisdictions.

Writing

The representation of language in a textual medium through the use of a set of signs or symbols.

Oral Contract

A verbal agreement between parties that is legally binding, though more difficult to prove than a written contract.