Identify Which of the Following Statements Is False

question 59

Multiple Choice

Identify which of the following statements is false.

• A)Liquidating distributions made to minority shareholders in the tax-free liquidation of a controlled subsidiary corporation are treated by the liquidating corporation in the same way as nonliquidating distributions.
• B)Sec. 337(a)provides that the liquidating corporation recognizes no gain or loss on the distribution of property to the 80% distributee in a complete Sec. 332 liquidation.
• C)The depreciation recapture provisions in Secs. 1245 and 1250 override the Sec. 337(a)nonrecognition rule if a controlled subsidiary corporation is liquidated into its parent corporation.
• D)A corporation that distributes the stock of a subsidiary may elect to treat the distribution as a sale of the subsidiary's assets.

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Definitions:

First-in

Commonly part of the term "First-in, First-out (FIFO)", a method used in inventory management where the oldest stock is sold first.

Labor

Work performed by humans that is used in the production of goods and services.

Equivalent Unit

A metric in cost accounting that quantifies the effort invested in partially finished units by equating it to the output of completely finished units.

First-in

implies the method where the earliest goods produced or acquired are the first to be used or sold.