Which of the Following Statements Is Correct with Respect to the Formation

question 54

Multiple Choice

Which of the following statements is correct with respect to the formation of a corporation?

• A)The basis of the stock in the hands of the shareholder will be equal to the basis of the property contributed plus any gain recognized minus any boot received.
• B)If the 80% test is met,the transferors may recognize a gain or a loss,depending on the facts and circumstances.
• C)To the corporation,the basis of property received is equal to the basis of the property in the hands of the transferor.
• D)The transferor will record a gain if he or she contributes property subject to a liability.

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