When Consideration Is Transferred to a Corporation in Return for Stock

question 53

True/False

When consideration is transferred to a corporation in return for stock, the definition of "property" is important because tax deferral treatment of § 351 is available only to taxpayers who transfer property.

---

Definitions:

Non-amortized Debt

Debt that is not regularly reduced through payments covering principle and interest over time.

Interest Payments

Interest payments are the regular payments made to a lender by a borrower for the use of borrowed money, typically calculated as a percentage of the principal.

Principal

The original sum of money borrowed in a loan or the initial amount of investment, exclusive of any interest or dividends.

Par Value

The face value of a bond or stock as stated by the issuing company, which may differ from its market value.