A Taxpayer Transfers Assets and Liabilities to a Corporation in Return

question 59

True/False

A taxpayer transfers assets and liabilities to a corporation in return for its stock. If the liabilities exceed the basis of the assets transferred, the taxpayer will recognize gain to avoid having a negative basis in the stock.

---

Definitions:

Thermocline

A layer in a body of water or the atmosphere where temperature changes more rapidly with depth than it does in the layers above or below.

Upper

Generally refers to something that is located above something else or higher in position, order, or rank.

Lower Levels

Refers to the foundational or basic elements in a structure or system, often relating to the base of a hierarchical arrangement.

Descending Air

Air movement downward towards the Earth's surface, often leading to warming and drying conditions, impacting weather and climate patterns.