Question

Tina incorporates her sole proprietorship with assets having a fair market value of $100,000 and an adjusted basis of $110,000. Even though § 351 applies, Tina may recognize her realized loss of $10,000.true/false

Answer 1

Statement is false

Step-by-step explanation:

As per section 351, if an individual transfers property or assets to the the corporation in exchange for stock and takes ownership of the organization after such exchange is not liable to recognize any gain or loss on account of such transaction.

Here, Tina gains ownership through transferring assets in exchange for stock, as per section 351, she cannot recognize realized loss of $10,000.