To Be Considered a Section 1202 Gain, the Stock Being

question 666

Multiple Choice

To be considered a Section 1202 gain, the stock being sold must meet all of the following characteristics except

• A) at least 50% of the value of the corporation's assets must be used in the active conduct of one or more qualified trades or businesses.
• B) the stock must be held more than five years.
• C) the stock must be issued after August 10, 1993.
• D) the corporation which issued the stock must be a C corporation.

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Definitions:

Receivables

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Sales

The total amount of goods or services sold by a business within a certain period.

Total Assets Turnover Ratio

A financial metric that measures a company's effectiveness in using its assets to generate sales, calculated as sales divided by total assets.

Assets

Resources owned by a company that have economic value and can be converted into cash.