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:

Self-confident

Possessing trust in one's abilities, qualities, and judgment.

Preferred Environment

An ideal or most favorable setting in which an individual feels most comfortable or performs best.

Vocational Choice

The process of selecting a career path or occupation based on personal interests, abilities, and available opportunities.

Work Environment

A work environment encompasses the physical and psychological conditions under which employees operate, including the office layout, culture, and company policies.