When a Corporation Is Formed,if the Sole Shareholder Contributes Property

question 96

True/False

When a corporation is formed,if the sole shareholder contributes property and receives,in return,stock plus property,the individual will report a taxable gain equal to the FMV of the property received.

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Definitions:

Consistency

In accounting, the principle that requires the same accounting methods to be used from period to period for comparability.

Accounting Principles

The rules and guidelines that companies must follow when reporting financial data.

Cash Basis

A financial recording strategy where incomes and costs are documented at the time they are actually exchanged, instead of the moment they are accrued.

Services

Economic activities offered by one party to another, often involving professional support or advice rather than a tangible product.