Which of the following statements best describes the tax consequences that arise from a contribution of capital to a corporation by an existing sole-shareholder?

Question

Quizplus · Accepted Answer

When an existing sole-shareholder makes a contribution of capital to a corporation, the shareholder does not recognize gain or loss on the transfer. Additionally, the corporation's basis in the property transferred equals the shareholder's basis in the property transferred. This is in accordance with Section 351 of the Internal Revenue Code.

Which of the Following Statements Best Describes the Tax Consequences