To Be Considered a Section 1202 Gain,the Stock Being Sold

question 65

Multiple Choice

To be considered a Section 1202 gain,the stock being sold must meet all of the following characteristics except

• A)the stock must be issued after August 10,1993.
• B)the stock must be held more than five years.
• C)the corporation which issued the stock must be a C corporation.
• D)at least 50% of the value of the corporation's assets must be used in the active conduct of one or more qualified trades or businesses.

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Definitions:

Licensing

An agreement in which a company allows another entity to produce its product in exchange for a predetermined fee.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Franchising

A method of business expansion whereby a company (franchisor) licenses its trade name and operating methods to an individual or group (franchisee) in exchange for a franchise fee and ongoing royalties.

Marketing Support

Services or resources provided to aid and enhance marketing efforts and initiatives.