Which of the Following Statements Best Describes the Tax Results

question 111

Multiple Choice

Which of the following statements best describes the tax results to a shareholder in a section 351 transaction when liabilities on property transferred to the corporation are assumed by the corporation?

• A)Liabilities assumed by a corporation on a section 351 transfer are always treated as boot.
• B)Liabilities assumed by a corporation on a section 351 transfer are never treated as boot.
• C)Liabilities assumed by a corporation on a section 351 transfer are treated as boot if the total liabilities assumed exceed the total basis of the assets transferred.
• D)Liabilities assumed by a corporation on a section 351 transfer are treated as boot if there is no business purpose for the assumption of the liabilities by the corporation.

---

Definitions:

Making Sense

The process of understanding or comprehending something by organizing and interpreting information.

Verbal Messages

Information or ideas conveyed through spoken words or written language.

Communication Behavior

The ways in which individuals express themselves verbally and non-verbally during interactions.

Impact

The strong effect or influence that one thing has on another.