Identify Which of the Following Statements Is True

question 103

Multiple Choice

Identify which of the following statements is true.

• A)A transferor's gain or loss that goes unrecognized when Sec. 351 applies is permanently exempt from taxation.
• B)If a taxpayer transfers property and services as part of a transaction meeting the Sec. 351 requirements, all of the stock received is counted in determining whether the property transferors have acquired control.
• C)If a taxpayer transfers property and services as part of a transaction meeting the Sec. 351 requirements, the nonrecognition of gain or loss will apply to the services.
• D)All of the above are false.

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Definitions:

Wage Rate

The wage rate is the amount of compensation a worker receives per unit of time worked, often expressed per hour or per year.

Marginal Revenue Product

The extra revenue generated by employing one additional unit of a resource, such as labor or capital.

Diminishing Marginal Returns

A principle stating that after an optimal point, further increases in one input while holding others constant will result in smaller and smaller gains in output.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a variable input.