Identify Which of the Following Statements Is True

question 85

Multiple Choice

Identify which of the following statements is true.

• A)The FMV of an obligation is used to determine the E&P reduction when a corporation distributes the obligation to its shareholders.
• B)When appreciated property is distributed to shareholders, E&P must be increased by any gain (net of taxes)recognized due to the property distribution.
• C)When appreciated property is distributed in a nonliquidating distribution, the net effect on the distributing corporation's E&P is that it is reduced by the net of the FMV of the property distributed minus the gain (net of federal income taxes)recognized due to the property distribution.
• D)Only B and C above are true.

---

Definitions:

Type A Personality

A personality trait characterized by high levels of competitiveness, self-imposed stress, and a constant sense of urgency.

Competitive

Characterized by or involving competition between entities such as individuals or businesses.

Hot-Tempered

A temperament characterized by quickness to anger or impatience.

Cortisol

A steroid hormone released by the adrenal glands in response to stress or low blood glucose; plays a key part in the body's stress response.