If an Individual Transfers an Ongoing Business to a Corporation

question 119

Multiple Choice

If an individual transfers an ongoing business to a corporation in a Sec. 351 exchange, the individual must recognize any realized gain

• A)only if the adjusted basis of the property transferred is less than the FMV of the stock received.
• B)if the transferor receives property other than stock.
• C)if the FMV of the property exchanged exceeds the FMV of the stock received.
• D)both A and B above

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Definitions:

Introductory Paragraph

An initial section of a text designed to introduce the topic, engage the reader, and outline the main points that will be covered.

Counterproposal

A proposal offered in response to a previous proposal, typically aiming to negotiate or compromise on differing terms.

Counterproposal

A proposal offered in response to one previously made, often as a form of negotiation or compromise.

Engineering Graduate

An individual who has received a degree in engineering from a college or university.