Identify Which of the Following Statements Is True

question 32

Multiple Choice

Identify which of the following statements is true.

• A)The assignment of income doctrine requires a cash method of accounting for a transferor/shareholder to recognize income when accounts receivable are transferred by the shareholder to the corporation in a Sec. 351 exchange in which no gain is otherwise recognized.
• B)The assignment of income doctrine is a legislative requirement that income be taxed to the person who earns it.
• C)The assignment of income doctrine does not apply if the transferor in a Sec. 351 exchange in which no gain is otherwise recognized transfers when a sole proprietor transfers substantially all the assets and liabilities of the transferor's trade or business to a controlled corporation.
• D)All of the above are false.

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Definitions:

Manifest Function

The intended and recognized positive consequences of any social pattern or institution.

Emotional Support

Describes assistance given to individuals through empathy, concern, encouragement, or companionship, helping them manage or overcome emotional distress.

Socially Constructed

A concept or perception of an object or idea that exists because people agree to behave as if it exists or follow certain conventional rules.

Human Interpretation

The process by which individuals understand or make sense of information, symbols, language, and actions based on their cognitive and subjective frameworks.