Identify Which of the Following Statements Is False

question 54

Multiple Choice

Identify which of the following statements is false.

• A)An individual taxpayer, who is assessed an additional payment of money based on stock ownership in a corporation whose stock is redeemed in a complete liquidation, may recognize a capital loss to the extent of the additional assessment.
• B)The open transaction doctrine defers the shareholder's gain or loss from a liquidation until the assets can be valued by sale or collection.
• C)The open transaction doctrine as applied to complete corporate liquidations refers to the numerous planning alternatives available when liquidating a corporation.
• D)The IRS asserts that the open transaction doctrine should be used only in extraordinary circumstances.

---

Definitions:

Basic Necessities

Fundamental needs required for sustaining human life, including food, water, shelter, and clothing.

Poverty

A state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living.

Solomon Asch

A psychologist known for his research on conformity, including the Asch conformity experiments.

Conformity

Changing one’s own behavior to match that of other people.