Which of the following characteristics is the same for transfers of property to both a corporation and to a partnership in exchange solely for an ownership interest?
A)The transferors must have control of the corporation or partnership after the transfer.
B)Liabilities assumed affect the owner's basis in the entity's business in the same manner.
C)Loss is not recognized.
D)The holding period for all the assets transferred begins on the date of the transfer.

Question

Quizplus · Accepted Answer

Loss is not recognized in both cases because the tax code allows for the deferral of recognition of loss on transfers of property to a corporation or partnership in exchange for an ownership interest, aiming to encourage the formation of businesses without immediate tax consequences.

Which of the Following Characteristics Is the Same for Transfers