Question 1.1.(TCO C) Which of the following is an advantage of a C corporation?

a.Shareholders not liable for tax based on the corporations income b. Can elect to be taxed as a sole proprietorship. c. Subject to double taxation d.Unlimited liability

Question 2.2.(TCO C) Which is true of the provisions of IRC 351?

a.It allows for ordinary loss treatment. b. It applies to transfers of property for stock and debt instruments. c. It encourages corporate formation. d. Taxpayers must make an election to qualify under IRC 351.

Question 3.3.(TCO C) Which of the following is not considered boot?

a.Investments b.Vehicle c.Cash d.Nonqualified preferred stock

Question 4.4.(TCO C) Which is true regarding the transfer of liabilities?

a. Liabilities transferred in excess of adjusted basis of property transferred causes gain. b. Liabilities transferred in excess of the original debt causes gain recognition. c. Liabilities in excess of basis are calculated on an aggregate basis. d. Cash-basis taxpayers accounts payable is an example of a transfer of a liability.

Question 5.5.(TCO F) IRC 1244 allows for what?

a.Nonrecognition on a like-kind exchange b.Deductibility of losses on certain stock as capital losses c.Deduction of losses on sale of certain stock as an ordinary loss d. Ordinary loss treatment up to $25,000