Which of the Following Statements Best Describes the Tax Consequences

question 19

Multiple Choice

Which of the following statements best describes the tax consequences that arise from a contribution of capital to a corporation by an existing shareholder?

• A)The shareholder recognizes gain and loss on the transfer and the corporation's basis in the property transferred equals its fair market value.
• B)The shareholder does not recognize gain and loss on the transfer and the corporation's basis in the property transferred equals the shareholder's basis in the property transferred.
• C)The shareholder recognizes gain and loss on the transfer and the corporation's basis in the property transferred equals the shareholder's basis in the property transferred.
• D)The shareholder does not recognize gain and loss on the transfer and the corporation's basis in the property transferred equals zero.

---

Definitions:

Degrees of Freedom

The quantity of autonomous numbers or measures that can be allocated to a statistical distribution while still adhering to all restrictions.

Sample Size

The number of observations or elements drawn from a larger population for the purpose of statistical analysis.

Null Hypothesis

A hypothesis that there is no effect or no difference, and it serves as the default assumption in statistical hypothesis testing.

Correlation Coefficient

A statistical index ranging from -1 to 1 that measures the degree of association between two variables.