Identify Which of the Following Statements Is True

question 94

Multiple Choice

Identify which of the following statements is true.

• A) 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.
• B) 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.
• 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:

New Products

Items that have been recently introduced to the marketplace, offering new features or technologies.

Entrepreneurs

Innovative individuals who start and run businesses, often taking on financial risks in the hope of profit, and playing a key role in economic development.

Increase Value

The process of enhancing the worth or utility of a product, service, or asset.

Resource Value

Refers to the economic value assigned to natural or human resources based on their utility in producing goods and services.