Identify Which of the Following Statements Is True

question 78

Multiple Choice

Identify which of the following statements is true.

• A)A tax-free spin-off coming under Sec. 355 occurs when a parent corporation distributes stock in a controlled subsidiary corporation in exchange for some of its own stock.
• B)Tax-free split-offs and spin-offs coming under Sec. 355 require the surrender of shareholder stock.
• C)When boot is received in a Sec. 355 spin-off transaction, the FMV of the boot will be a dividend to the extent of the shareholder's ratable share of the distributing corporation's E&P.
• D)All of the above are false.

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Definitions:

Absolute Advantage

The capacity for a person, business, or nation to create a product or offer a service with a per-unit expense that's beneath the cost any other party can achieve for that same product or service.

Opportunity Cost

Discarding possible profits from other actions upon committing to one course.

Avatar

A graphical representation of a user or the user's character or persona, commonly used in virtual worlds, online games, and forums.

Tattoo

Permanent marks or designs made on the body by inserting pigment through pricks into the skin's dermis layer.