Identify Which of the Following Statements Is True

question 50

Multiple Choice

Identify which of the following statements is true.

• A)The transferee corporation's acquisition or assumption of liabilities in excess of the total adjusted bases of the properties transferred by a transferor results in a gain recognition by the transferor.
• B)When a transferor exchanges a mortgaged property under Sec. 351 and the amount of the mortgage is greater than the transferor's basis in the property, the transferor's basis in the stock received will be equal to the basis the transferor had in the mortgaged property.
• C)When forming a corporation, the accounts payable of a transferor's business are not liabilities for gain computation purposes if the transferor's business uses the accrual method of accounting.
• D)All of the above are false.

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Definitions:

Standards

Established norms or criteria defining technical specifications, quality benchmarks, and practices intended to ensure reliability, safety, and compatibility in products, services, or processes.

Guanxi

A Chinese term describing the network of relationships among people, influencing personal and business interactions and outcomes.

Reciprocity

A mutual exchange of privileges or concessions, often between two countries, such as trade agreements or recognition of licenses.

Partnerships

A legally sanctioned business cooperation among several individuals who collectively manage the enterprise and distribute its profits.