Identify Which of the Following Statements Is True

question 61

Multiple Choice

Identify which of the following statements is true.

• A) The shareholder's basis in property received in a nonliquidating distribution is the property's FMV reduced by liabilities assumed by the shareholder.
• B) If both the current and accumulated E&P have deficit balances, a corporate distribution cannot be characterized as a dividend.
• C) A corporation recognizes gain when distributing money as a dividend to its shareholders.
• D) All of the above are false.

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Definitions:

Utility Function

A mathematical representation that captures the level of satisfaction or happiness that consumers derive from consuming goods and services.

Initial Endowment

The original distribution of resources, wealth, or abilities that individuals or groups possess in an economic model.

Pareto Optimal

A state of allocation of resources from which it is impossible to make any individual better off without making at least one individual worse off.

Utility Function

An economic model that describes how consumers rank different bundles of goods based on the levels of happiness or satisfaction they provide.