Which of the following exchanges is not considered a nontaxable transaction?
A)Transfer of property to a partnership in exchange for a partnership interest
B)Transfer of property owned by a controlling shareholder to the corporation in exchange for stock
C)Exchange of common stock for common stock of the same corporation
D)All of the above are nontaxable transactions.

Question

Quizplus · Accepted Answer

All the options listed (A, B, and C) describe scenarios that are generally considered nontaxable transactions under U.S. tax law. Specifically, these include contributing property to a partnership for an interest in the partnership, transferring property to a corporation in exchange for stock by a controlling shareholder, and exchanging common stock for common stock of the same corporation, all of which can qualify for non-recognition of gain or loss if certain conditions are met.

Which of the Following Exchanges Is Not Considered a Nontaxable