Question 1

What amount of gain or loss does Keegan realize on the transfer of the property to his corporation?

Accepted Answer

Gain reali

Question 2

Billie transferred her 20 percent interest to Jean Company as part of a complete liquidation of the company. In the exchange, she received land with a fair market value of $200,000. Billie's basis in the Jean stock was $100,000. The land had a basis to Jean Company of $400,000. What amount of loss does Jean recognize in the exchange and what is Billie's basis in the land she receives? Billie is not considered a related party to Jean Company.

Accepted Answer

A)  $200,000 loss recognized by Jean and a basis in the land of $200,000 
B)  $200,000 loss recognized by Jean and a basis in the land of $400,000 
C)  No loss recognized by Jean and a basis in the land of $200,000 
D)  No loss recognized by Jean and a basis in the land of $400,000 
A)  $200,000 loss recognized by Jean and a basis in the land of $200,000 
B)  $200,000 loss recognized by Jean and a basis in the land of $400,000 
C)  No loss recognized by Jean and a basis in the land of $200,000 
D)  No loss recognized by Jean and a basis in the land of $400,000

Question 3

Which of the following statements does not describe a requirement that must be met in a tax-deferred forward triangular merger?

Accepted Answer

A)  The 40 percent continuity of interest test must be met with respect to the stock transferred from the acquisition corporation to the target corporation shareholders. 
B)  The acquirer must hold substantially all of the target corporation's properties after the merger. 
C)  The continuity of business enterprise test must be met with respect to the target corporation. 
D)  The target corporation shareholders must receive voting stock in the acquiring corporation. 
A)  The 40 percent continuity of interest test must be met with respect to the stock transferred from the acquisition corporation to the target corporation shareholders. 
B)  The acquirer must hold substantially all of the target corporation's properties after the merger. 
C)  The continuity of business enterprise test must be met with respect to the target corporation. 
D)  The target corporation shareholders must receive voting stock in the acquiring corporation.

Question 4

Ashley transfers property with a tax basis of $5,000 and a fair market value of $3,000 to a corporation in exchange for stock with a fair market value of $2,000 and $500 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $500 on the property transferred. What is Ashley's tax basis in the stock received in the exchange?

Accepted Answer

A)  $5,000 
B)  $4,000 
C)  $3,000 
D)  $2,000 
A)  $5,000 
B)  $4,000 
C)  $3,000 
D)  $2,000

Question 5

Antoine transfers property with a tax basis of $500 and a fair market value of $600 to a corporation in exchange for stock with a fair market value of $550 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $50 on the property transferred. What is Antoine's tax basis in the stock received in the exchange?

Accepted Answer

A)  $600 
B)  $550 
C)  $500 
D)  $450 
A)  $600 
B)  $550 
C)  $500 
D)  $450

Question 6

Amy transfers property with a tax basis of $900 and a fair market value of $600 to a corporation in exchange for stock with a fair market value of $450 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $150 on the property transferred. What is Amy's tax basis in the stock received in the exchange?

Accepted Answer

A)  $900 
B)  $750 
C)  $650 
D)  $450 
A)  $900 
B)  $750 
C)  $650 
D)  $450

Question 7

Jasmine transferred 100 percent of her stock in Emerald Company to Jade Corporation in a Type A merger. In exchange she received stock in Jade with a fair market value of $800,000 plus $1,200,000 in cash. Jasmine's tax basis in the Emerald stock was $900,000. What amount of gain does Jasmine recognize in the exchange and what is her basis in the Jade stock she receives?

Accepted Answer

$1,100,000 gain reco

Question 8

Paladin Corporation transferred its 90 percent interest to Furman Company as part of a complete liquidation of the company. In the exchange, Paladin received land with a fair market value of $1,000,000. The corporation's basis in the Furman Company stock was $400,000. The land had a basis to Furman Company of $200,000. What amount of gain does Paladin recognize in the exchange and what is its basis in the land it receives?

Accepted Answer

A)  $600,000 gain recognized and a basis in the land of $1,000,000 
B)  $600,000 gain recognized and a basis in the land of $400,000 
C)  No gain recognized and a basis in the land of $400,000 
D)  No gain recognized and a basis in the land of $200,000 
A)  $600,000 gain recognized and a basis in the land of $1,000,000 
B)  $600,000 gain recognized and a basis in the land of $400,000 
C)  No gain recognized and a basis in the land of $400,000 
D)  No gain recognized and a basis in the land of $200,000

Question 9

Tax considerations always are the primary reason for how an acquisition is structured.

Accepted Answer

A) True 
 B)False

Question 10

Maria defers $100 of gain realized in a section 351 transaction. The stock she receives in the exchange has a fair market value of $500. Maria's tax basis in the stock will be $400.

Accepted Answer

A) True 
 B)False

Question 11

What amount of gain or loss does Mike recognize in the complete liquidation?

Accepted Answer

Mike recognizes gain of $150,0

Question 12

Which statement best describes the concept of realization as it applies to gain or loss?

Accepted Answer

A)  Realization is the recording of gain or loss on a tax return. 
B)  Realization is the result of an exchange of property rights in a transaction. 
C)  Realization is the excess of amount realized over adjusted basis. 
D)  Realization is the excess of adjusted basis over amount realized. 
A)  Realization is the recording of gain or loss on a tax return. 
B)  Realization is the result of an exchange of property rights in a transaction. 
C)  Realization is the excess of amount realized over adjusted basis. 
D)  Realization is the excess of adjusted basis over amount realized.

Question 13

Robin transferred her 60 percent interest to Cardinal Company as part of a complete liquidation of the company. In the exchange, she received land with a fair market value of $800,000. Robin's basis in the Cardinal stock was $900,000. The land had a basis to Cardinal Company of $1,000,000. What amount of loss does Cardinal recognize in the exchange and what is Robin's basis in the land she receives? The distribution was non pro rata to Robin, a related person.

Accepted Answer

A)  $200,000 loss recognized by Cardinal and a basis in the land of $1,000,000 
B)  $200,000 loss recognized by Cardinal and a basis in the land of $800,000 
C)  No loss recognized by Cardinal and a basis in the land of $1,000,000 
D)  No loss recognized by Cardinal and a basis in the land of $800,000 
A)  $200,000 loss recognized by Cardinal and a basis in the land of $1,000,000 
B)  $200,000 loss recognized by Cardinal and a basis in the land of $800,000 
C)  No loss recognized by Cardinal and a basis in the land of $1,000,000 
D)  No loss recognized by Cardinal and a basis in the land of $800,000

Question 14

Which of the following statements best describes a section 338 transaction?

Accepted Answer

A)  A section 338 transaction is an election made by the buyer to treat a stock acquisition as an asset acquisition. 
B)  A section 338 transaction is an election made by the buyer to treat an asset acquisition as a stock acquisition. 
C)  A section 338 transaction is an election made by the seller to treat a stock acquisition as an asset acquisition. 
D)  A section 338 transaction is an election made by the seller to treat an asset acquisition as a stock acquisition. 
A)  A section 338 transaction is an election made by the buyer to treat a stock acquisition as an asset acquisition. 
B)  A section 338 transaction is an election made by the buyer to treat an asset acquisition as a stock acquisition. 
C)  A section 338 transaction is an election made by the seller to treat a stock acquisition as an asset acquisition. 
D)  A section 338 transaction is an election made by the seller to treat an asset acquisition as a stock acquisition.

Question 15

A liquidated corporation always recognizes loss realized in a complete liquidation where none of the shareholders is a corporation.

Accepted Answer

A) True 
 B)False

Question 16

Katarina transferred her 10 percent interest to Spartan Company as part of a complete liquidation of the company. In the exchange, she received land with a fair market value of $200,000. Katarina's basis in the Spartan stock was $100,000. The land had a basis to Spartan Company of $50,000. What amount of gain does Spartan recognize in the exchange and what is Katarina's basis in the land she receives?

Accepted Answer

A)  $100,000 gain recognized by Spartan and a basis in the land of $200,000 
B)  $150,000 gain recognized by Spartan and a basis in the land of $200,000 
C)  No gain recognized by Spartan and a basis in the land of $100,000 
D)  No gain recognized by Spartan and a basis in the land of $50,000 
A)  $100,000 gain recognized by Spartan and a basis in the land of $200,000 
B)  $150,000 gain recognized by Spartan and a basis in the land of $200,000 
C)  No gain recognized by Spartan and a basis in the land of $100,000 
D)  No gain recognized by Spartan and a basis in the land of $50,000

Question 17

Rachelle transfers property with a tax basis of $800 and a fair market value of $900 to a corporation in exchange for stock with a fair market value of $750 and $50 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $100 on the property transferred. What is Rachelle's tax basis in the stock received in the exchange?

Accepted Answer

A)  $900 
B)  $850 
C)  $750 
D)  $700 
A)  $900 
B)  $850 
C)  $750 
D)  $700

Question 18

Which of the following statements does not describe a requirement that must be met in a tax-deferred reverse triangular merger?

Accepted Answer

A)  The 40 percent continuity of interest test must be met with respect to the stock transferred from the acquisition corporation to the target corporation shareholders. 
B)  The target must hold substantially all of the target corporation's properties and the properties of the acquisition subsidiary after the merger. 
C)  The continuity of business enterprise test must be met with respect to the target corporation. 
D)  The target corporation shareholders must receive voting stock in the acquiring corporation. 
A)  The 40 percent continuity of interest test must be met with respect to the stock transferred from the acquisition corporation to the target corporation shareholders. 
B)  The target must hold substantially all of the target corporation's properties and the properties of the acquisition subsidiary after the merger. 
C)  The continuity of business enterprise test must be met with respect to the target corporation. 
D)  The target corporation shareholders must receive voting stock in the acquiring corporation.

Question 19

What amount of gain or loss does Gary recognize in the complete liquidation?

Accepted Answer

Gary recognizes gain of $70,00

Question 20

A taxpayer always will have a tax basis in boot received in a section 351 transaction equal to its fair market value.

Accepted Answer

A) True 
 B)False

What amount of gain or loss does Keegan realize on the transfer of the property to his corporation?

Which of the following statements does not describe a requirement that must be met in a tax-deferred forward triangular merger?

Tax considerations always are the primary reason for how an acquisition is structured.

Maria defers $100 of gain realized in a section 351 transaction. The stock she receives in the exchange has a fair market value of $500. Maria's tax basis in the stock will be $400.

What amount of gain or loss does Mike recognize in the complete liquidation?

Which statement best describes the concept of realization as it applies to gain or loss?

Which of the following statements best describes a section 338 transaction?

A liquidated corporation always recognizes loss realized in a complete liquidation where none of the shareholders is a corporation.

Which of the following statements does not describe a requirement that must be met in a tax-deferred reverse triangular merger?

What amount of gain or loss does Gary recognize in the complete liquidation?

A taxpayer always will have a tax basis in boot received in a section 351 transaction equal to its fair market value.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The US Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning of the Cfa Institute

Filters

Exam 19: Corporate Formation, Reorganization, and Liquidation

What amount of gain or loss does Keegan realize on the transfer of the property to his corporation?

Which of the following statements does not describe a requirement that must be met in a tax-deferred forward triangular merger?

Tax considerations always are the primary reason for how an acquisition is structured.

Maria defers $100 of gain realized in a section 351 transaction. The stock she receives in the exchange has a fair market value of $500. Maria's tax basis in the stock will be $400.

What amount of gain or loss does Mike recognize in the complete liquidation?

Which statement best describes the concept of realization as it applies to gain or loss?

Which of the following statements best describes a section 338 transaction?

A liquidated corporation always recognizes loss realized in a complete liquidation where none of the shareholders is a corporation.

Which of the following statements does not describe a requirement that must be met in a tax-deferred reverse triangular merger?

What amount of gain or loss does Gary recognize in the complete liquidation?

A taxpayer always will have a tax basis in boot received in a section 351 transaction equal to its fair market value.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The US Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning of the Cfa Institute

Filters