Aaron Purchases a Building for $500,000 Which Is Going to Be

question 116

Multiple Choice

Aaron purchases a building for $500,000 which is going to be used by his wholly-owned corporation.Which of the following statements are correct?

• A)If Aaron contributes the building to the corporation,there will be no recognition under § 351 and a carryover basis of $500,000.
• B)If Aaron leases the building to the corporation,lease-rental payments of $30,000 per year to Aaron will result in a $30,000 deduction for the corporation.
• C)If Aaron leases the building to the corporation,lease-rental payments of $30,000 per year to Aaron will result in $30,000 of gross income for Aaron.
• D)Leasing the building to the corporation will contribute to the tax avoidance objective of minimizing double taxation.
• E)All of the above are correct.

---

Definitions:

Prizes

Rewards given for a particular achievement, competition, or lottery, often in the form of money, goods, or titles.

Liability

Legal responsibility for one's actions or omissions, which may result in being required to compensate for harm or damage caused.

User Friendly

Characteristic of a product, system, or service that is easy to use and understand, requiring minimal effort or expertise from the user.

Weight Loss Pill

A pharmacological agent designed to reduce or control weight, typically by suppressing appetite or increasing metabolism.