Question

When a taxpayer transfers property subject to a mortgage to a controlled corporation in an exchange qualifying under § 351, the transferor shareholder’s basis in stock received in the transferee corporation is increased by the amount of the mortgage on the property.a.trueb.false

Answer 1

a. True

Step-by-step explanation:

Under the U.S corporate tax laws, when a taxpayer transfers property subject to a mortgage to a controlled corporation in an exchange qualifying under section, § 351, the transferor shareholder’s basis in stock received in the transferee corporation is increased by the amount of the mortgage on the property.