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C239 Topic 7-8-9 test questions and answers
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C239 Topic 7-8-9 test questions and answers
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C239 Topic 7-8-9test questions
and answers
Tax deferred under sect 351 - answer -One or
More persons transfer property for stock
-Immediately after the transfer these same
shareholders control the corporation
--Persons include individuals, corps,
partnership, and fiduciaries
--Property includes money tangible and
intangible assets
--property received other than stock is boot
and will cause gain (not loss)
--Control is 80% or more of the total
combined voting power of all voting stock
and 80% or more of total number of shares of
each class of nonvoting stock
, Boot Received - answer -Gain recognied not
to exceed lesser of gain realized or FMV of
boot received
-Allocate boot to each contributed property
using the relative FMV of the properties
-Character of gain is determined by type of
property to which gain is allocated
Tax basis of stock received - answer Cash +
Tax basis of other property + Gain recognized
- FMV of boot - Liabilities assumed
Assumption of LIabilities - answer Taxpayer
recognizes gain to extent of liabilities
assumed exceed aggregate tax basis of
properties transferred, allocate by character
based on relative FMV of the assets
-does not include liabilities which would give
rise to a deduction
Corporate consequences - answer No
gain/loss on receipt of property in exchange
for stock
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