Identify Which of the Following Statements Is True

question 36

Multiple Choice

Identify which of the following statements is true.

• A) The liquidating corporation does not recognize gains and losses when making a distribution of nonmoney property.
• B) 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.
• C) 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.
• D) All of the above are false.

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Definitions:

Normative

Refers to prescriptive concepts, reflecting beliefs about what ought to be rather than what is.

Positive

In the context of economics, a situation or correlation in which an increase in one variable leads to an increase in another variable.

Normative

Pertaining to statements or norms that express values, judgments, or opinions on what should be, rather than what is.

Normative Statement

A type of statement that expresses a value judgment about what ought to be, based on personal beliefs rather than hard facts.