When a Taxpayer Transfers Property Subject to a Mortgage to a Controlled

question 40

True/False

When a taxpayer transfers property subject to a mortgage to a controlled corporation in an exchange qualifying under § 351, the transferor shareholder's basis in stock received in the transferee corporation is increased by the amount of the mortgage on the property.

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Definitions:

Passive Continental Margin

The transition between oceanic and continental lithosphere that is not an active plate margin; these regions typically experience little to no tectonic activity.

Plate Boundaries

Regions where two tectonic plates meet, characterized by seismic and volcanic activity due to plate interactions.

Red Circle

A geometric shape defined by all points in a plane at a constant distance from a specific point (the center) with a reddish hue.

Volcanic Activity

The process by which magma and associated gases rise to the Earth's surface through a volcano or other vent, resulting in eruptions that can impact climate, geography, and ecosystems.