Identify Which of the Following Statements Is True

question 39

Multiple Choice

Identify which of the following statements is true.

• A) Tax attributes of the target corporation are not lost when a Sec. 338 deemed liquidation election is made.
• B) A Sec. 338 election requires the adoption of the old target corporation's tax year by the new target corporation.
• C) When the acquiring corporation makes the Sec. 338 election, the target corporation is treated in many respects as a new corporation.
• D) All of the above are false.

---

Definitions:

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.

Target Cost Approach

A pricing method where the selling price is set first, and then the target cost is determined by subtracting a desired profit margin.

Markup

The amount added to the cost of goods to cover overhead and profit, determining the selling price.

Selling Price

The amount of money charged for a product or service, determined by adding a profit margin to the product cost.