Identify Which of the Following Statements Is False

question 26

Multiple Choice

Identify which of the following statements is false.

• A) The rules for the recognition of a gain or loss by a corporation that distributes property in redemption of its stock are the same as the rules for property distributions that are not in redemption of stock.
• B) Under Sec. 311, a corporation does not recognize a loss when it distributes property that has declined in value.
• C) When a stock redemption is considered a sale of stock by the shareholder, the E&P of the redeeming corporation is reduced by the FMV of the property used to redeem the stock.
• D) Generally, little or no gain is recognized by the redeeming shareholder in a qualified Sec. 303 redemption.

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Definitions:

Cognitive Processes

Mental actions or operations that include thinking, reasoning, problem-solving, decision-making, and memory.

Equilibrium

A state of balance or stability arising from the equal action of opposing forces.

Self-reinforcement

Administering rewards or punishments to oneself for meeting, exceeding, or falling short of one’s own expectations or standards.

Conscience

An inner feeling or voice viewed as a guide to the rightness or wrongness of one's behavior.