Identify Which of the Following Statements Is True

question 1

Multiple Choice

Identify which of the following statements is true.

• A) The basis of property acquired in a reorganization is its FMV.
• B) The acquisition of liabilities by an acquiring corporation will trigger a gain.
• C) A target corporation will recognize a gain when it distributes stock to its shareholders.
• D) Depreciation recapture rules do not override the nonrecognition of gain or loss rules.

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Definitions:

Office Furniture

Items of furniture intended for use in various office tasks, such as desks, chairs, and filing cabinets.

Double-Declining-Balance

A method of accelerated depreciation where an asset's book value is reduced at twice the rate of its straight-line depreciation.

Resale Value

The estimated market value of an asset at a future point in time, when it is likely to be sold or traded.

Office Furniture

Furniture designed specifically for use in workplace settings, including desks, chairs, filing cabinets, and bookcases.