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WorksheetsTAX-FREE EXCHANGES OF PROPERTIES
Total questions: 10
Worksheet time: 6mins
Within the context under Section 40(C)(2) of the 1997 Tax Code, as amended the term “control”, shall mean an ownership of stocks in a corporation possessing at least fifty percent of the total voting power of all classes of stocks entitled to vote.
TRUE
FALSE
Within the context under Section 40(C)(2) of the 1997 Tax Code, as amended the term used in reference to both the value of the property in the hands of the transferee after its transfer and the shares received by the Transferor from the Transferee.
Adjusted Basis
Historical Cost
Substituted Basis
Original Basis
Pursuant to Section 40(C)(2) of the 1997 Tax Code, as amended the term “adjusted basis” is the term used in determining the tax basis of property or shares for purposes of computing the gain or loss on the subsequent disposition of property or shares.
TRUE
FALSE
For purposes of tax-free exchange under Section 40(C)(2) of the 1997 Tax Code, as amended , the value of shares to be issued by reason of exchange should be equal to the fair market value of the property transferred. Consequently, the number of shares to be issued will be computed on the basis of the fair market value of the property transferred.
TRUE
FALSE
under Section 40(C)(2) of the 1997 Tax Code, as amended- the formation of the same corporate business with the same asset and the same stockholders surviving under a new charter.
REINCORPORATION
MERGER
REORGANIZATION
RECAPITALIZATION
Under Section 40(C)(5) of the 1997 Tax Code, as amended, the substituted basis of the properties transferred shall be determines as follows, except.
Stock or Securities received by the Transferor
Property in the Hands of the Transferee
Property in the hands of Transferor
The Original Basis of Property to be Transferred
The Original basis of the property to be transferred under Section 40(C)(5) of the 1997 Tax Code, as amended shall be the following except.
The cost of the property, if acquired by purchase on or after March 1, 1913
The fair market price or value as of the moment of death of the decedent, if acquired by inheritance
The basis in the hands of the donor or the last preceding owner by whom the property was not acquired by gift, if the property was acquired by donation
The amount paid by the transferor for the property, if the property was acquired for less than an adequate consideration in money or money’s worth
Under Section 40(C)(2) of the 1997 Tax Code, as amended -an arrangement where the stock and bonds of a corporation are readjusted as to amount, income, or priority or an agreement of all stockholders and creditors to change and increase or decrease the capitalization or debts of the corporation or both.
RECAPITALIZATION
MERGER
REORGANIZATION
REINCORPORATION
•Issuance of CERTIFICATE AUTHORIZING REGISTRATION (CAR)-In case the transactions involves transfer of multiple real properties or shares of stocks situated in various locations covered by different RDOs, the CAR shall be processed with the RDO having the jurisdiction over the place where the transferee corporation is registered.
TRUE
FALSE
No gain or loss shall be recognized if property to a corporation by a person, alone or together with others, not exceeding four (4) persons, in exchange for stock or unit of participation in such a corporation of which as a result of such exchange, the transferor or transferors, collectively, gains or maintains control of said corporation
TRUE
FALSE
