Details of this Paper

MCQs - Corporate Organization and Capital Structure

Description

solution


Question

Question;1.Section 351 applies only to the formation of new corporations.Select one:TrueFalse2.At the formation of Corporation D the following transactions occur:A transfers land to a D Corporation in return for 500 shares and the corporations asssumption of $100,000 debt. The land had an adjusted basis of $360,000 and a fair market value of $600,000.B also receives 500 shares based on transfering $200,000 cash and as consideration for agreeing to perform services for the corporation.Which of the following statements are true.Select one:Section 351 applies causing no recognition of income by either A or BSection 351 applies causing A to report $100,000 of gain based on the receipt of $100,000 boot.Section 351 does not apply because the 80% control test is not met.Section 351 applies causing A to recognize no gain, but B will recognize $300,000 of compensation income.None of the above3.Section 351 does not apply to the issuance of stock solely for services.Select one:TrueFalse4.At the formation of Corporation D the following transactions occur:A transfers land to D Corporation in return for 500 shares and the corporation's asssumption of $100,000 debt. The land had an adjusted basis of $360,000 and a fair market value of $600,000.B also receives 500 shares based on transfering $200,000 cash and as consideration for agreeing to perform services for the corporation.Which of the following statements are true.Select one:D corporation can claim a deduction of $300,000 based on the issuance of shares to B for servicesA's adjusted basis in the stock acquired is $260,000The corporation's adjusted basis in the land is $360,000.All of the abovea. and b. are correct5.Gain from Section 1244 stock is treated as ordinary income.Select one:TrueFalse6.To determine the adjusted basis in the stock acquired in a Section 351 transfer you should consult SectionSelect one:357362358None of the above7.By issuing debt to taxpayers who are also their shareholders a corporation has created a way to reduce double taxation as to both the principal and interest payments.Select one:TrueFalse8.A owns 1000 shares of F Corporation. It is proposed that an additional 1001 shares will be issued to C in return for land worth $100,000 (adjusted basis $20,000) and $100 cash. At the same time one share will be issued to A for $100.Which of the following statements are true?Select one:Section 351 applies because A and B transferred property for stock and controlled the corporation after the transfer.The corporation's adjusted basis in the land is $20,000C's adjusted basis in the stock is $20,100All of the aboveNone of the above9.When corporations issue shares as compensation for services performed, the corporation will deduct the amount reported as income by the employee.Select one:TrueFalse10.At the formation of Corporation D the following transactions occur:A transfers land to a D Corporation in return for 500 shares and the corporations asssumption of $100,000 debt. The land had an adjusted basis of $60,000 and a fair market value of $600,000.B also receives 500 shares based on transfering $500,000 cash11.Which of the following statements are true.Select one:B's adjusted basis in the stock is $500,000A must recognize $40,000 gainAll of the aboveNone of the above

 

Paper#40047 | Written in 18-Jul-2015

Price : $19
SiteLock