Which of the following statements is correct?
A)The purchase of an unincorporated sole proprietorship is always treated as the purchase of the business.
B)A taxpayer purchasing a corporation in which the assets are appreciated would prefer to purchase the assets of the corporation.
C)The purchase of a corporation is always treated as the purchase of the corporate stock.
D)Only a.and b.are correct.
E)a. ,b. ,and c.are correct.

Question

Quizplus · Accepted Answer

When assets are appreciated, the basis of the assets cannot be increased to fair market value upon sale. Therefore, the taxpayer may prefer to purchase just the assets of the corporation to avoid paying tax on the appreciation upon sale. However, this may not always be the case and depends on the specific circumstances of the purchase. Choices A and C are incorrect as they make blanket statements that are not always true.

Which of the Following Statements Is Correct