Contributions of Property in Exchange for S Corporate Stock Are

question 49

Multiple Choice

Contributions of property in exchange for S corporate stock are nontaxable only if

• A)On the date of exchange there is no real difference between the value of the property given and the stock taken back.
• B)The persons involved in the transaction own at least 80 percent of the S corporation when the transfer is completed.
• C)The S corporation is a not-for-profit organization.
• D)Both the corporation and the persons involved in the transaction agree that the tax will not be recognized at this time and a copy of that agreement is filed with the corporation's tax return.

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Definitions:

Mechanic

A skilled worker who repairs and maintains machinery, equipment, or vehicles.

Music Room

A dedicated space designed for the practice, composition, and enjoyment of music, often equipped with musical instruments and sound-proofing.

Lien

A legal right or claim against a property by a creditor, securing the payment of a debt or the performance of some obligation.

Secured Interest

An interest in personal property or fixtures that secures payment or performance to a creditor.