Which of the Following Statements Does Not Describe a Tax

question 94

Multiple Choice

Which of the following statements does not describe a tax consequence to shareholders in a complete liquidation?

• A)All complete liquidations are taxable to the shareholders.
• B)Complete liquidations are taxable to all individual shareholders.
• C)Complete liquidations are taxable to all corporate shareholders owning stock of the liquidated corporation representing less than 80 percent or more of voting power and value.
• D)Complete liquidations are tax-deferred to corporate shareholders owning stock of the liquidated corporation representing 80 percent or more of voting power and value.

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Definitions:

Peristalsis

A series of wave-like muscle contractions that move food to different processing stations in the digestive tract.

Ascites

Accumulation of fluid in the peritoneal cavity, causing abdominal swelling, often due to liver disease or cancer.

Eructation

The scientific term for belching or burping, the release of gas from the digestive tract through the mouth.

Mastication

The process of chewing food in preparation for swallowing and digestion.