Nonrecognition Transaction in Taxation


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Under Section 361 of the IRS tax code, which scenario would trigger a non-recognized gain?

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1. Company A is reorganizing. They agree to distribute assets of $500,000 to a buyer in exchange for qualified property. Which of the following is considered qualified property under section 361?

2. Corporation B transfers all assets to a buyer. Assets are valued at $25,000, but the stock received is worth $15,000. This is part of a reorganization. Which of the following is true?

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About This Quiz & Worksheet

Complete the quiz and worksheet to see what you know about nonrecognition transactions in taxation. Examples of non-recognized gains and the U.S. tax code are covered on the quiz.

Quiz & Worksheet Goals

You can check your understanding of:

  • What section 361 of the U.S. tax code would consider a qualified property
  • Gain and loss as part of a reorganization
  • Triggering a non-recognized gain under section 361
  • Interpreting a sample reorganization scenario

Skills Practiced

  • Reading comprehension - ensure that you draw the most important details from the lesson on nonrecognition transactions in taxation
  • Information recall - access the knowledge you have gained about taxation to interpret a sample scenario involving a loss
  • Knowledge application - use your knowledge to answer questions about section 361 of the U.S. tax code

Additional Learning

To learn more, watch or read the lesson called Nonrecognition Transaction in Taxation. Goals you can complete include:

  • Determine what a qualified property is
  • Review the treatment of distributions
  • See what a nonrecognition transaction applies to