The Basis of Stock Received in a §351 Transaction Is

question 10

Multiple Choice

The basis of stock received in a §351 transaction is:

• A)The adjusted basis of the property contributed.
• B)The adjusted basis of the property contributed + shareholder gain - boot received.
• C)The adjusted basis of the property contributed - shareholder gain + boot received.
• D)The fair market value of the property contributed.
• E)The fair market value of the property contributed less any liabilities.

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Definitions:

Dividend

A portion of a company's earnings distributed to shareholders, typically in the form of cash or additional stock.

Weighted Average Cost

A method of calculating the combined cost of goods available for sale by weighting the cost of each item by the quantity purchased.