Tax Chapter 13 Questions
True / False – Chapter 13
Maria defers $100 of gain realized in a section 351 transactions. The stock she receives in the exchange has a fair market value of $500. Maria 's tax basis in the stock will be $400. True
Control as it relates to a section 351 transaction is strictly defined to be 80 percent or more of the voting power of the stock of the corporation to which property is transferred. False
The definition of property as it relates to a §351 transaction includes money. True
To meet the control test under section 351, a taxpayer transferring property to a corporation must by himself own 80 percent or more of the corporation 's voting stock and 80 percent of each class of nonvoting stock after the transfer even if there are other transferors of property. False
Gain and loss realized in section 351 transactions will be recognized if the taxpayer receives boot in the exchange. False
A taxpayer must receive voting common stock to be eligible for deferral in a section 351 exchanges. False
A taxpayer always will have a tax basis in boot received in a section 351 transactions equal to its fair market value. True
M Corporation assumes a $200 liability attached to property transferred to it by Jane in a section 351 transactions. The assumed liability will, as a general rule, be treated as boot received by Jane. False
Han transferred land he held as an investment to his corporation in a section 351 transactions. Han had held the land for two years prior to the transfer. Han 's holding period in the stock he received in the exchange includes the period for which he held the land before transferring it to the corporation. True
In general, a corporation can choose to use either the accrual or cash method of accounting no matter how large the corporation. False
Corporations calculate adjusted gross income (AGI) in the same way as individuals. False
Corporations have a larger standard deduction than individual taxpayers because they generally
Maria defers $100 of gain realized in a section 351 transactions. The stock she receives in the exchange has a fair market value of $500. Maria 's tax basis in the stock will be $400. True
Control as it relates to a section 351 transaction is strictly defined to be 80 percent or more of the voting power of the stock of the corporation to which property is transferred. False
The definition of property as it relates to a §351 transaction includes money. True
To meet the control test under section 351, a taxpayer transferring property to a corporation must by himself own 80 percent or more of the corporation 's voting stock and 80 percent of each class of nonvoting stock after the transfer even if there are other transferors of property. False
Gain and loss realized in section 351 transactions will be recognized if the taxpayer receives boot in the exchange. False
A taxpayer must receive voting common stock to be eligible for deferral in a section 351 exchanges. False
A taxpayer always will have a tax basis in boot received in a section 351 transactions equal to its fair market value. True
M Corporation assumes a $200 liability attached to property transferred to it by Jane in a section 351 transactions. The assumed liability will, as a general rule, be treated as boot received by Jane. False
Han transferred land he held as an investment to his corporation in a section 351 transactions. Han had held the land for two years prior to the transfer. Han 's holding period in the stock he received in the exchange includes the period for which he held the land before transferring it to the corporation. True
In general, a corporation can choose to use either the accrual or cash method of accounting no matter how large the corporation. False
Corporations calculate adjusted gross income (AGI) in the same way as individuals. False
Corporations have a larger standard deduction than individual taxpayers because they generally