A Subsidiary Must Recognize Depreciation Recapture Income When the Subsidiary

question 20

True/False

A subsidiary must recognize depreciation recapture income when the subsidiary is liquidated into the parent.

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Definitions:

Directors

People selected by the corporation's shareholders to supervise the administration and strategize decisions for the company.

Shareholder's Meeting

A gathering of a company's shareholders where important issues are discussed, and decisions are made about the company's affairs.

Proxy

Authorization to represent a corporate shareholder to serve as his or her agent and vote his or her shares in a certain manner.

Greater-Than-Majority Vote

A voting requirement in decision-making processes that necessitates more than 50% of the votes to pass a motion or make a decision.