Identify Which of the Following Statements Is True

question 70

Multiple Choice

Identify which of the following statements is true.

• A)In general, a noncorporate shareholder that receives a distribution in complete liquidation of the liquidating corporation recognizes his or her entire realized gain as a capital gain.
• B)The basis for nonmoney property received by a noncorporate shareholder as part of a liquidating distribution is the same as its basis on the books of the liquidating corporation.
• C)The liquidating corporation does not recognize gains and losses when making a distribution of nonmoney property.
• D)All of the above are false.

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Definitions:

Cash Sales

Transactions in which payment for goods or services is made at the time of sale, typically in cash form.

Manufacturing Costs

Costs associated with the production of goods, including direct materials, direct labor, and manufacturing overhead.

Insurance Expense

The cost incurred by a business for insurance policies to protect against various risks.

Property Tax

A tax assessed on real estate by the local government, based on the property's value.