PLS ANSWER ALL QUESTIONS Organizational costs and startup costs: a. never result
ID: 2461078 • Letter: P
Question
PLS ANSWER ALL QUESTIONS
Organizational costs and startup costs:
a.
never result in a tax benefit to the corporation.
b.
are interchangeable.
c.
are deductible (up to a statutory limit) in the year incurred.
d.
must be capitalized and amortized over 180 months.
Question 2
Section 351 transfers include transfers to corporations of:
a.
property in exchange for 75% of the outstanding stock.
b.
trade or business real property solely in exchange for stock.
c.
only personal property in exchange for stock
d.
services in exchange for common stock.
Question 3
Which of the following statements are required under Reg. Sec. 1.351-3 regarding Section 351 transfers?
a.
The statement is attached to the corporation return only.
b.
The statement is required to be filed by only the majority transferee.
c.
A description of the property transferred and its basis in the hands of the transferors.
d.
The statement must show transferee data only.
Question 4
The following are examples of Start-Up Costs:
a.
Stock issuance cost pursuant to an SEC registration
b.
Pre-opening advertising
c.
Section 351 transfer expenses.
d.
Lawyers' fees to draft the corporation's articles of incorporation.
Question 5
The following is true about ways to avoid or reduce boot in a Section 351 transfer:
a.
Have the corporation assume more liabilities.
b.
Transfer more assets to the corporation.
c.
Transfer cash back to the transferor.
d.
Transfer more assets with liabilities in excess of basis.
Question 6
The three entity questions in the Check the Box Regulations include:
a.
Is the entity a separate entity for state law purposes?
b.
If the entity is a true corporation, how do you want it classified?
c.
If the entity is a separate entity, is it a corporation or a trust?
d.
If the entity is a separate entity, is it a partnership?
Question 7
The following is true about Boot in a Section 351 transfer:
a.
Boot is only cash received by the transferor.
b.
Boot includes liabilities assumed by the transferor.
c.
Boot includes liabilities assumed in excess of basis of the assets transferred.
d.
Boot is only cash received by the corporation.
Question 8
In order to meet the Continuity of Life characteristic, an entity must:
a.
die when its owners die.
b.
be split up when an owner gets divorced.
c.
have more than one owner.
d.
survive if one of its owners declares bankruptcy.
Question 9
The following is true for basis in Section 351 transfers:
a.
Step up in basis for the corporation.
b.
Substituted basis for assets received by the transferor.
c.
Carryover basis applies to the corporations and the transferor.
d.
Transferor carryover basis is increased by liabilities assumed.
Question 10
For purposes of determining corporate characteristics, Limited Liability means:
a.
owners' liability is limited to their investment.
b.
Limited liability of the management.
c.
limited personal guarantees by the owners.
d.
limited partnerships are the only entities with this characteristic.
Question 11
Section 351, properly complied with, confers non-taxable treatment to:
individual transfers only
transferee corporations only
transferee partnerships
transferors and transferee corporations
Question 12
Which of the following corporate characteristics is not considered when determining whether an entity may be treated as a corporation?
a.
common stock
b.
centralized management
c.
continuity of life
d.
limited liability
a.
never result in a tax benefit to the corporation.
b.
are interchangeable.
c.
are deductible (up to a statutory limit) in the year incurred.
d.
must be capitalized and amortized over 180 months.
Explanation / Answer
1.
Answer is d. must be capitalized and amortized over 180 months.
2.
Answer is b. trade or business real property solely in exchange for stock.
3.
Answer is c. A description of the property transferred and its basis in the hands of the transferors.
4.
Answer is b. Pre-opening advertising
5.
Answer is d. Transfer more assets with liabilities in excess of basis.
6.
Answer is b. If the entity is a true corporation, how do you want it classified?
7.
Answer is c. Boot includes liabilities assumed in excess of basis of the assets transferred.
8.
Answer is d. survive if one of its owners declares bankruptcy.
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