Identify Which of the Following Statements Is False

question 82

Multiple Choice

Identify which of the following statements is false.

• A)The rules for the recognition of a gain or loss by a corporation that distributes property in redemption of its stock are the same as the rules for property distributions that are not in redemption of stock.
• B)Generally, little or no gain is recognized by the redeeming shareholder in a qualified Sec. 303 redemption.
• C)When a stock redemption is considered a sale of stock by the shareholder, the E&P of the redeeming corporation is reduced by the FMV of the property used to redeem the stock.
• D)Under Sec. 311, a corporation does not recognize a loss when it distributes property that has declined in value.

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Definitions:

U.S. Dollar

The official currency of the United States of America, widely used as a benchmark and reserve currency globally.

Income Statement

A financial statement that shows a company’s revenue and expenses over a specific period, leading to the net income or loss for that period.

Functional Currency

Functional currency is the main currency used by a business or economic entity in its primary economic environment for accounting purposes.

Straight-Line Method

A method of accounting for depreciation by equally spreading the cost of an asset over its useful life.