Which of the following statements about boot included in a nontaxable exchange is false?
A) The purpose of boot is to equalize the values of the exchanged properties.
B) The payment of boot triggers recognition of realized gain to the payer.
C) The receipt of boot triggers recognition of realized gain to the recipient.
D) The receipt of boot does not trigger recognition of realized loss to the recipient.

Question

Quizplus · Accepted Answer

The payment of boot does not trigger recognition of realized gain to the payer. Rather, it is the receipt of boot that triggers recognition of realized gain to the recipient. Option A is a true statement, as boot is used to equalize the values of the properties being exchanged. Option C is also true, as the receipt of boot triggers recognition of realized gain to the recipient. Option D is also true, as the receipt of boot does not trigger recognition of realized loss to the recipient.

Which of the Following Statements About Boot Included in a Nontaxable