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:

Sample Mean

The average of a sample set of numbers, calculated by adding up all the numbers and dividing by the count of numbers in the set.

Sample Mean

The average value of a sample set of numbers.

Freshmen

First-year students in a secondary or post-secondary educational institution.

Probability

The evaluation of how probable an event is, shown as a numerical value between 0 and 1, where 0 stands for the event being impossible and 1 representing absolute certainty of the event occurring.