Question
In a section 351 transaction where the shareholder transfers property (basis of $10, FMV of $20) subject to a business debt (debt of $3) to
In a section 351 transaction where the shareholder transfers property (basis of $10, FMV of $20) subject to a business debt (debt of $3) to a corporation in which he receives only the corporation’s stock representing a controlling interest, the corporation’s basis in the property received will be:
Equal to the basis of the property transferred less the amount of the debt
Equal to the basis of the property transferred less the debt the corporation takes the property subject to plus the recognized gain
Equal to the basis of the property transferred
Equal to the basis of the property transferred plus the deck corporation takes the property subject to plus the realized gainIn a section 351 transaction the basis to the Corporation when receiving multiple assets from a shareholder should be:
Allocated between the assets based on their respective fair market values
Equal to the basis of each respective asset
Allocated between the assets when the assets are appreciated property
Equal to the basis of the respective asset only when both assets are depreciated property
In a section 351 transaction the basis to a shareholder in the “boot” received will be:
The basis of the boot when gain is realized
Equal to the basis of the boot when loss recognized
Equal to the basis of the boot when gain is recognized
Equal to the fair market value when gain is recognized
In a section 351 transaction when a corporation pays a liability that it took a property subject to, the corporation:
Increases its basis in the asset acquired
Decreases its basis in the asset acquired
Increases its basis in the asset where gain is recognized to the shareholder
Decreases its basis were loss as recognized to the shareholder
In a section 351 transaction, when debt is attached to property and is in excess of the basis of the property contributed by a shareholder to a corporation:
The excess debt will be treated as “boot” if the transferor recognizes either gain or loss
The excess debt will be treated as “boot” if the transferor only recognizes gain
The excess debt will be treated as “boot” if the transferor only recognizes loss
The excess debt will never be treated as “boot” in connection with a 351 transaction
In a section 351 transaction, the transferors of property need to own the following to have “control” of the corporation:
80% of the voting stock and no shares of the nonvoting stock
80% of the voting and nonvoting class of stock
100% of the voting and 75% of the nonvoting class of stock
75% of the voting and 100% of the nonvoting class of stock
In a section 351 transaction, if the transferors of property owned stock with contingent voting rights in order to have “control” of the corporation the shareholder must own:
80% of the voting stock after the contingency occurs and no shares of the nonvoting stock
80% of the voting stock regardless of the contingency and nonvoting class of stock
100% of the voting stock after the contingency occurs and 75% of the nonvoting class of stock
75% of the voting regardless of the contingency and 100% of the nonvoting class of stock .
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