Identify Which of the Following Statements Is False

question 45

Multiple Choice

Identify which of the following statements is false.

• A) The parent corporation takes a basis in property received when liquidating a subsidiary corporation in a Sec. 332 liquidation equal to its basis to the subsidiary corporation.
• B) Property received by a minority shareholder takes a basis equal to its fair market value.
• C) Section 332 is applicable to both the parent corporation and the minority shareholders if they exist.
• D) Minority shareholders involved in a Sec. 332 subsidiary liquidation must recognize a gain or loss under the Sec. 331 general liquidation rules.

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Definitions:

Statement of Changes in Equity

A financial statement that shows the changes in a company’s equity over a reporting period.