Which of the Following Statements Best Describes the "Built-In Loss

question 83

Multiple Choice

Which of the following statements best describes the "built-in loss" rules that apply to property transferred to a corporation under section 351?

• A) If the basis of a property transferred to a corporation under section 351 exceeds its fair market value, the corporation will always take a tax basis in the property equal to the property's fair market value.
• B) If the basis of a property transferred to a corporation under section 351 exceeds its fair market value, the corporation will always take a tax basis in the property equal to the property's tax basis in the hands of the shareholder.
• C) If the aggregate basis of all property transferred to a corporation under section 351 exceeds its aggregate fair market value, the aggregate tax basis of the property in the hands of the corporation cannot exceed the aggregate fair market value of the property.
• D) If the aggregate basis of all property transferred to a corporation under section 351 exceeds its aggregate fair market value, the aggregate tax basis of the property in the hands of the corporation cannot exceed the aggregate tax basis of the property.

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Definitions:

Z Test

This method tests if two populations' means differ, assuming known variances and a large sample size.

Group 1

A designation for the first cohort or category in an experimental or observational study, often used as a reference or control group.

Multinomial Population

A population in a statistical model where outcomes can fall into three or more categories.

Normal Population

A population in which the data follows a normal distribution, characterized by a bell-shaped curve.