Which of the Statements Is Inaccurate Regarding Requirements for Nonrecognition

question 58

Multiple Choice

Which of the statements is inaccurate regarding requirements for nonrecognition of gain or loss upon the transfer of assets to a corporation in exchange for stock?

• A)Depreciation recapture applies to a transfer which falls under Sec.351.
• B)Property must be transferred to the corporation solely in exchange for stock of the corporation.
• C)The transferor-shareholders must be in control (80%)of the corporation immediately after the exchange.
• D)If property or money is received by the transferor,gain (but not loss)is recognized to the extent of the lesser of the boot received or the realized gain.

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Definitions:

Sold Out

A situation where all available units of a product or tickets for an event have been purchased, and none are available for sale.

Supply Curves

Graphical representations that show the relationship between the price of a good and the quantity of the good supplied.

Perfectly Elastic

Describes a situation in which the quantity demanded or supplied responds infinitely at a particular price level but is zero at any other price level.

Long Run

A period in economics where all factors of production and costs are variable, allowing for full adjustment to changes.