If an individual transfers an ongoing business to a corporation in a Sec. 351 exchange, the individual must recognize any realized gain
A)only if the adjusted basis of the property transferred is less than the FMV of the stock received.
B)if the transferor receives property other than stock.
C)if the FMV of the property exchanged exceeds the FMV of the stock received.
D)both A and B above

Question

Quizplus · Accepted Answer

In a Sec. 351 exchange, gain is recognized if the transferor receives property other than stock (boot).

If an Individual Transfers an Ongoing Business to a Corporation