Exam Question $15$

Which of the following statements regarding transfers of property or services is true?

A For a transfer of property to a corporation, no gain is recognized by the taxpayer if the transferred property is encumbered with liabilities in excess of the taxpayer's basis in the property.

B If receipt of stock is subject to a substantial risk of forfeiture, income is recognized by the recipient in the year the stock is received even though the substantial risk of forfeiture has not lapsed.

C If the contributing partner receives a capital interest in the partnership upon contribution of services, the contributor will be taxed on the transfer when the contributor actually receives profits.

D In order for an exchange of services to a partnership for a profit interest to qualify as a nontaxable event, the service partner must provide services to the partnership or for its benefit, and the services must be provided by the service partner in his capacity as a partner.