How are a​ transferor's holding period determined for stock and other property​ (boot) received in a Sec. 351​ exchange? A. The​ transferor's (shareholder's) holding period for the stock received in exchange for​ non-capital assets​ (e.g. inventory), capital assets or Sec. 1231 assets will begin on the day after the exchange date. B. The​ transferor's (shareholder's) holding period for the stock includes the holding period of any​ non-capital assets​ (e.g. inventory), capital assets or Sec. 1231 assets transferred. C. The​ transferor's (shareholder's) holding period for the stock includes the holding period of any capital assets or Sec. 1231 assets transferred. If the shareholder transfers any other​ property, the holding period for any stock received begins on the day after the exchange date. D. The​ transferor's (shareholder's) holding period for the stock issued in exchange for any capital assets or Sec. 1231 assets transferred begins the day after the exchange date. If the shareholder transfers any other​ property, the holding period for any stock received includes the holding period of those​ non-capital assets transferred.

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Answer:

C. The transferor's (shareholder's) holding period for the stock includes the holding period of any capital assets or Sec. 1231 assets transferred. If the shareholder transfers any other​ property, the holding period for any stock received begins on the date after the exchange date.

Explanation:

Transferors does experience any gain or loss when they exchange property for stock even the non - cash property received. The gain been received, does not depend on the type of property transferred.