 |
| 1 | |
Gain realized in a transaction is defined as the excess of the amount realized over the adjusted basis of the property exchanged. |
| | A) | True |
| | B) | False |
|
|
|
| 2 | |
Martin defers $500 of gain realized in a section 351 transaction. The stock he receives in the exchange has a fair market value of $800. Martin's tax basis in the stock will be $300. |
| | A) | True |
| | B) | False |
|
|
|
| 3 | |
Nan realizes a $2,000 loss in a section 351 exchange but receives $500 of boot in the exchange. Nan can recognize $500 of the loss realized as a result of receiving the boot. |
| | A) | True |
| | B) | False |
|
|
|
| 4 | |
Stock received in exchange for services provided to the corporation in the formation of the corporation can never be counted in determining if the control test is met for §351 purposes. |
| | A) | True |
| | B) | False |
|
|
|
| 5 | |
To receive tax deferral in a §351 transaction, an individual shareholder must own 80 percent or more of the corporation after the transaction. |
| | A) | True |
| | B) | False |
|
|
|
| 6 | |
The requirements for tax deferral in a stock-for-stock "B reorganization" and a reverse triangular Type A merger are the same. |
| | A) | True |
| | B) | False |
|
|
|
| 7 | |
A corporate shareholder of a corporation that is completely liquidated will always receive tax deferral on the liquidation proceeds received. |
| | A) | True |
| | B) | False |
|
|
|
| 8 | |
A liquidated corporation always recognizes loss realized in a complete liquidation. |
| | A) | True |
| | B) | False |
|
|
|
| 9 | |
Amelia transfers property with a tax basis of $500 and a fair market value of $900 to a corporation in exchange for stock with a fair market value of $800 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $100 on the property transferred. What is the corporation's tax basis in the property received in the exchange? |
| | A) | $900 |
| | B) | $800 |
| | C) | $700 |
| | D) | $500 |
|
|
|
| 10 | |
Gabrielle transfers property with a tax basis of $400 and a fair market value of $700 to a corporation in exchange for stock with a fair market value of $500 and $100 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $100 on the property transferred. What is Gabrielle's tax basis in the stock received in the exchange? |
| | A) | $300 |
| | B) | $400 |
| | C) | $500 |
| | D) | $700 |
|
|
|
| 11 | |
Emily transferred 100 percent of her stock in Nelson Company to Admiral Corporation in a Type A merger. In exchange she received stock in Admiral with a fair market value of $200,000 plus $100,000 in cash. Emily's tax basis in the Nelson stock was $50,000. What amount of gain, if any, does Emily recognize in the exchange and what is her basis in the Admiral stock she receives? |
| | A) | $0 gain recognized and a basis in the Admiral stock of $50,000 |
| | B) | $100,000 gain recognized and a basis in the Admiral stock of $50,000 |
| | C) | $0 gain recognized and a basis in the Admiral stock of $200,000 |
| | D) | $100,000 gain recognized and a basis in the Admiral stock of $200,000 |
|
|
|
| 12 | |
Which of the following statements does not describe a tax consequence to the liquidated corporation in a complete liquidation? |
| | A) | The liquidated corporation always recognizes gain on appreciated property distributed to individuals. |
| | B) | The liquidated corporation always recognizes gain on appreciated property distributed to corporations. |
| | C) | The liquidated corporation does not recognize gain on appreciated property distributed to a corporation that owns 80 percent or more of the liquidated corporation's stock. |
| | D) | The liquidated corporation does not recognize loss on depreciated property distributed to a corporation that owns 80 percent or more of the liquidated corporation's stock. |
|
|
|
| 13 | |
Yuri transferred his 20 percent interest to Petersburg Company as part of a complete liquidation of the company. In the exchange he received land with a fair market value of $200,000. Yuri's basis in the Petersburg stock was $100,000. The land had a basis to Petersburg Company of $50,000. What amount of gain does Yuri recognize in the exchange and what is his basis in the land he receives? |
| | A) | No gain recognized and a basis in the land of $50,000 |
| | B) | No gain recognized and a basis in the land of $100,000 |
| | C) | $100,000 gain recognized and a basis in the land of $100,000 |
| | D) | $100,000 gain recognized and a basis in the land of $200,000 |
|
|
|
| 14 | |
Bronco Corporation transferred its 80 percent interest to Mustang Company as part of a complete liquidation of the company. In the exchange Bronco received land with a fair market value of $500,000. Bronco's tax basis in the Mustang stock was $200,000. The land had a tax basis to Mustang Company of $100,000. What amount of gain does Bronco recognize in the exchange, if any, and what is its tax basis in the land it receives? |
| | A) | No gain recognized and a basis in the land of $100,000 |
| | B) | No gain recognized and a basis in the land of $500,000 |
| | C) | $300,000 gain recognized and a basis in the land of $100,000 |
| | D) | $300,000 gain recognized and a basis in the land of $500,000 |
|
|
|
| 15 | |
Eagle Corporation transferred its 80 percent interest to Hawk Company as part of a complete liquidation of the company. In the exchange Eagle received land with a fair market value of $500,000. Eagle's tax basis in the Hawk stock was $600,000. The land had a tax basis to Mustang Company of $800,000. What amount of loss does Hawk recognize in the exchange, if any, and what is Eagle's tax basis in the land it receives? |
| | A) | Hawk recognizes a $300,000 loss and Eagle's basis in the land is $500,000 |
| | B) | Hawk recognizes a $300,000 loss and Eagle's basis in the land is $800,000 |
| | C) | Hawk does not recognize any loss and Eagle's basis in the land is $500,000 |
| | D) | Hawk does not recognize any loss and Eagle's basis in the land is $800,000 |
|
|
.