No Gain or Loss Is Recorded for Exchanges of Plant

question 42

True/False

No gain or loss is recorded for exchanges of plant assets without commercial substance.

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Definitions:

Preincorporation Contract

An agreement entered into on behalf of a corporation before it is legally formed.

Corporate Promoter

An individual or entity that undertakes the efforts to organize and establish a corporation, including arranging initial capital, legal requirements, and business plans.

Liable

Subject to legal responsibility or obligation, typically involving financial restitution.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another party, such as a trustee's duty towards a beneficiary.