Identify Which of the Following Statements Is True

question 114

Multiple Choice

Identify which of the following statements is true.

• A) A corporation receiving property in a Sec. 351 exchange can select any MACRS depreciation method for the asset.
• B) The transferor must recapture depreciation when exchanging Sec. 1245 property in all transactions coming under Sec. 351.
• C) When depreciable property is transferred to a corporation in a Sec. 351 exchange in which no gain is recognized, the corporation must continue to use the transferor's depreciation method and recovery period for the property.
• D) All of the above are false.

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Definitions:

Domestic Corporations

Corporations that are incorporated and operate in the same country in which they are registered.

Consolidated Income Tax Return

A single income tax return filed by a parent company on behalf of itself and its subsidiaries, consolidating their income and taxes as one entity.

Domestic Corporations

Domestic corporations are businesses that are registered, incorporated, or formed within a specific country and operate under its laws.

Ownership

The state or fact of owning something, which includes the rights to use, sell, or receive income from it.