True and False Questions

1. When a business owner sells the assets of their business, any gain recognized is capital in nature.

2. Purchasers generally prefer stock acquisitions because of the step-up in the basis of the business assets.

3. A failed like-kind exchange is treated as a sale of asset(s) for federal income tax purposes.

4. Generally, basis in replacement property in like-kind exchange or involuntary conversion is carried over from conversion property.

5. A Section 368 reorganization requires an exchange of acquiror stock for target stock.

6. Section 351 (transfer of property to a corporation) or 721 (transfer of property to a partnership) is generally a tax-deferred transaction to the transferor and transferee for federal income tax purposes.

7. Exchange of partnership interests is generally treated as a qualified 1031 like-kind exchange.

8. Qualified Intermediary is an exchanger that sells property to buyer for like-kind exchange purposes.

9. Generally, sound business purpose requirement for tax free reorganizations is considered a statutory requirement.

10. A tax consolidated group is generally used by seller for Section 338(h)(10) purposes.