Identify Which of the Following Statements Is True

question 86

Multiple Choice

Identify which of the following statements is true.

• A) The repeal of Sec. 351 would result in more existing businesses being incorporated.
• B) The exchange of stock for services rendered is not a taxable transaction.
• C) Section 351 was enacted to allow taxpayers to incorporate without incurring adverse tax consequences.
• D) All of the above are false.

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Definitions:

Decreasing-Cost Industry

An industry in which the costs of production decrease as the industry expands, often due to efficiencies gained from economies of scale.

Technologically Progressive Industry

An industry characterized by rapid and continuous technological innovation, leading to dynamic growth and evolution of its products and services.

Long-Run Supply Curve

A graphical representation showing the quantities of a good or service that a firm is willing and able to supply at different prices over a period where all inputs can be varied.

Constant-Cost Industry

Constant-Cost Industry refers to an industry in which the input prices do not change as industry output changes, leading to a flat supply curve.