Identify Which of the Following Statements Is True

question 79

Multiple Choice

Identify which of the following statements is true.

• A)To determine a shareholder's basis in a single class of stock received in a Sec. 351 exchange, the FMV of the stock received must be known.
• B)If more than one asset is transferred by the transferor in a Sec. 351 nonrecognition transaction, the transferor is assumed to have received a proportionate share of the stock, cash, and other boot property for each property transferred based upon the assets' relative FMVs.
• C)The transferor's basis for any noncash boot property received in a Sec. 351 transaction is the boot's FMV reduced by any unrecognized gain.
• D)All of the above are false.

---

Definitions:

Investment Turnover

The ratio of net sales to average investment, measuring how effectively investments are used to generate sales.

Income From Operations

The income earned from the core business operations of a company, excluding non-operational income and expenses.

Invested Assets

Assets consisting of money or other items of value that are put into financial instruments or projects with the expectation of achieving income or profit.

Return On Investment

A performance measure used to evaluate the efficiency of an investment by comparing the amount of return relative to the investment’s cost.