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:

Medical Procedures

Operations or treatments performed by health professionals to diagnose, treat, or prevent disease.

Mobility Issues

Challenges in moving around, which can be due to various factors such as injury, disability, or aging, affecting one's ability to perform daily activities.

Common-Law Union

A relationship in which a couple lives together in a domestic partnership without a formal marriage ceremony but holds similar legal recognition in certain contexts.

Exogamy

The practice of marrying outside one's own social group, clan, or tribe, promoting genetic diversity and social alliances.