Alan, an Owl Corporation Shareholder, Makes a Contribution to Capital

question 54

True/False

Alan, an Owl Corporation shareholder, makes a contribution to capital of equipment to Owl, basis of $40,000 and fair market value of $50,000. Owl's basis of the equipment that Alan contributes is equal to $50,000, the property's fair market value.

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Definitions:

Ratifies

Formally confirms or approves an agreement or treaty, making it officially valid.

Bound

Obligated by law or duty to do something; being in a state of obligation.

Implied Authority

Powers not explicitly stated but inferred from a person's position or conduct, allowing them to perform tasks necessary to effectively execute their duties.

Legal Effect

The consequence(s) a law or regulation imposes on an individual's rights, duties, or privileges.