Identify Which of the Following Statements Is False

question 47

Multiple Choice

Identify which of the following statements is false.

• A) An individual taxpayer, who is assessed an additional payment of money based on stock ownership in a corporation whose stock is redeemed in a complete liquidation, may recognize a capital loss to the extent of the additional assessment.
• B) The open transaction doctrine defers the shareholder's gain or loss from a liquidation until the assets can be valued by sale or collection.
• C) The IRS asserts that the open transaction doctrine should be used only in extraordinary circumstances.
• D) The open transaction doctrine as applied to complete corporate liquidations refers to the numerous planning alternatives available when liquidating a corporation.

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Definitions:

Social Fact

Elements such as norms, values, and structures that exist external to the individual and exert influence over them, as defined by sociologist Émile Durkheim.

Émile Durkheim

A founding figure in sociology known for his work on social cohesion, collective conscience, and the study of social facts as phenomena external to individuals.

Collective Conscience

A set of shared beliefs, ideas, and moral attitudes which operate as a unifying force within society.

Mechanical Solidarity

A form of social cohesion in traditional societies where unity comes from individuals performing similar tasks and sharing values, traditions, and beliefs.