Identify Which of the Following Statements Is False

question 87

Multiple Choice

Identify which of the following statements is false.

• A)When determining the use of an NOL carryover following a change of ownership, the old loss corporation and the new loss corporation may be the same for Sec. 382 purposes.
• B)A new loss corporation that does not continue the business enterprise of the old loss corporation during the two-year period beginning on the date of the stock ownership change cannot use the net operating loss carryover.
• C)One advantage of a tax-free reorganization is that losses realized as part of a tax-free reorganization are not recognized.
• D)For purposes of Sec. 382, ownership changes are tested any time a 5% shareholder has a stock transaction affecting his ownership.

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Definitions:

Mining Partner

A member of a partnership formed for the purpose of mining activities, sharing in the profits and liabilities of the venture.

Transferable

Capable of being passed on or conveyed from one person or entity to another.

Partnership Capital

When a partnership or limited liability partnership is formed, partners contribute cash or other property to the partnership.

Loans

A financial arrangement in which an entity lends money to another with the expectation it will be repaid, often with interest.