Identify which of the following statements is true.
A)The definition of stock under Sec. 351 includes stock rights and warrants.
B)The receipt of property other than stock by the transferor will trigger the recognition of gain or loss under Sec. 351.
C)The character of the gain recognized by the transferor when boot is received in a Sec. 351 transaction depends on the type of boot received.
D)All of the above are false.

Question

Quizplus · Accepted Answer

None of the statements are true. According to Sec. 351, stock includes only "stock in a corporation." The receipt of property other than stock does not trigger recognition of gain or loss. And the gain recognized by the transferor when boot is received is always ordinary income.

Identify Which of the Following Statements Is True