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.

---

Definitions:

Romantic Overtures

Actions or gestures made to initiate a romantic relationship or express romantic interest.

Endorphins

Natural peptides produced by the brain that act as neurotransmitters to reduce pain perception and produce a feeling of well-being.

Sympathetic Nervous System

A part of the autonomic nervous system that prepares the body for quick action in emergencies, the 'fight or flight' response.

Limbic System

A complex system of nerves and networks in the brain, involved in basic emotions (such as fear and pleasure), drives (such as those for food and sex), and the formation of memories.