Identify Which of the Following Statements Is True

question 68

Multiple Choice

Identify which of the following statements is true.

• A)To qualify for Sec. 351 treatment, control is defined as more than 50% ownership of the voting stock, and more than 50% of all other classes of stock.
• B)If a shareholder receives stock with an FMV greater than the FMV of the property exchanged in a Sec. 351 transaction, the excess FMV may be considered a gift from one shareholder to another shareholder.
• C)Only transfers to newly created corporations qualify for Sec. 351 treatment.
• D)All of the above are false.

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Definitions:

Limited Liability Partnership

A business entity where partners have limited liabilities, protecting their personal assets from business debts.

Conduct Business

The act of engaging in activities or operations that relate to the buying, selling, or providing of goods or services.

Sole Proprietor

is a business owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.

Corporation

A legal entity that is separate from its owners, providing limited liability, and is able to own property, incur debt, sue and be sued.