Which of the Following Statements Best Describes the "Built-In Loss

question 83

Multiple Choice

Which of the following statements best describes the "built-in loss" rules that apply to property transferred to a corporation under section 351?

• A) If the basis of a property transferred to a corporation under section 351 exceeds its fair market value, the corporation will always take a tax basis in the property equal to the property's fair market value.
• B) If the basis of a property transferred to a corporation under section 351 exceeds its fair market value, the corporation will always take a tax basis in the property equal to the property's tax basis in the hands of the shareholder.
• C) If the aggregate basis of all property transferred to a corporation under section 351 exceeds its aggregate fair market value, the aggregate tax basis of the property in the hands of the corporation cannot exceed the aggregate fair market value of the property.
• D) If the aggregate basis of all property transferred to a corporation under section 351 exceeds its aggregate fair market value, the aggregate tax basis of the property in the hands of the corporation cannot exceed the aggregate tax basis of the property.

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Definitions:

Water Mixing

The process of combining water with other substances, which can result in solutions, suspensions, or other types of mixtures.

Smoky Plumes

Visible emissions of smoke, characterized by their dark or cloudy appearance, often emanating from fires, industrial operations, or volcanic activity.

Nuclear Power Plant

A facility that uses nuclear reactions to generate heat, which is then used to produce electricity.

Fuel Rods

Cylindrical tubes containing fissionable material, used in nuclear reactors to generate heat through nuclear reactions.