One Consequence of a Property Distribution by a Corporation to a Shareholder

question 80

Multiple Choice

One consequence of a property distribution by a corporation to a shareholder is that

• A) the shareholder's basis in the distributed property is the same as the distributing corporation's basis.
• B) the amount of the distribution is increased by any liability assumed by the shareholder.
• C) any liabilities assumed by the shareholder do not reduce the shareholder's basis.
• D) the holding period of the distributed property includes the holding period of the distributing corporation.

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Definitions:

Accounts Receivable

Amounts owed to a business for services performed or goods delivered.

Percentage Increase

A measure of how much a certain quantity grows over a specific period, expressed as a percentage of the original amount.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as net profit divided by initial cost.