Identify Which of the Following Statements Is True

question 81

Multiple Choice

Identify which of the following statements is true.

• A)The target corporation in a tax-free reorganization generally recognizes no gain or loss when boot property is received in exchange for assets because such property is usually distributed to its shareholders and creditors when the target corporation is liquidated.
• B)In tax-free reorganizations, one transaction cannot qualify for more than one type of tax-free reorganization.
• C)The Sec. 1245 recapture rules override the nonrecognition of gain or loss rules for an asset-for-stock tax-free reorganization.
• D)All of the above are false.

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Definitions:

Unemployed Resources

Assets, labor, or capital that are available but not currently being used in the production of goods or services.

Production Possibilities Frontier

A graphical representation that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.

Technological Improvement

Technological Improvement refers to advancements in technology that increase productivity and efficiency in the production of goods and services.

Inefficient Production

The process of producing goods or services in a way that uses more resources or takes more time than necessary, leading to wasted potential outputs.