1

The following is true for basis in Section 351 transfers:

	a.	Step up in basis for the corporation.
	b.	Substituted basis for assets received by the transferor.
	c.	Carryover basis applies to the corporations and the transferor.
	d.	Transferor carryover basis is increased by liabilities assumed.

2

For purposes of determining corporate characteristics, Limited Liability means:

	a.	owners' liability is limited to their investment.
	b.	Limited liability of the management.
	c.	limited personal guarantees by the owners.
	d.	limited partnerships are the only entities with this characteristic.

3

Section 351, properly complied with, confers non-taxable treatment to:

		individual transfers only
		transferee corporations only
		transferee partnerships
		transferors and transferee corporations

2.08 points

Question 12

Which of the following corporate characteristics is not considered when determining whether an entity may be treated as a corporation?

	a.	common stock
	b.	centralized management
	c.	continuity of life
	d.	limited liability