📏CPA EXAM PREP

Formation, Liquidation and Entity Select

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Question

What tax consequence does boot generally trigger in §351 or §721 transfers?

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Answer

Gain, up to the lesser of realized gain or boot.

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Question

Why are partnerships more flexible than corporations for staged contributions?

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Answer

§721 has no control requirement.

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Question

Why is §351 control a planning trap when bringing in new investors?

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Answer

It requires at least 80% control immediately after transfer.

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Question

What is the QSBS gain exclusion if stock is held at least 4 years and acquired after July 4, 2025?

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Answer

Seventy-five percent.

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