Identify Which of the Following Statements Is True

question 46

Multiple Choice

Identify which of the following statements is true.

• A) Able Corporation (New York) transfers its assets to Able Corporation (Delaware) in exchange for all of its stock. Able Corporation (New York) is liquidated. This exchange is a Type F reorganization.
• B) A suitable business purpose for a tax- free reorganization is to permit the minimization of shareholder taxes.
• C) Strict adherence to legislative guidelines with regard to reorganizations is sufficient for tax- free treatment.
• D) All of the above are false.

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Definitions:

Benjamin Franklin

A Founding Father of the United States, renowned for his contributions to the drafting of the Declaration of Independence and the U.S. Constitution, as well as his inventions and scientific discoveries.

Dividends

The part of corporate profits paid to its shareholders.

Payroll Tax

Taxes imposed on employers or employees, often calculated as a percentage of the salaries that employers pay their staff, funding social security and healthcare programs.

Social Security Tax

A charge imposed on both workers and their employers to finance the Social Security system, offering financial support to retirees, individuals with disabilities, and children of workers who have passed away.