Match Each of the Following Items with the Appropriate Description

question 95

Multiple Choice

Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary.
-Member's capital gain.

• A)Increases stock basis of subsidiary
• B)Decreases stock basis of subsidiary
• C)No effect on stock basis of subsidiary

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Definitions:

Common Law

A legal system based on court decisions and customs, as opposed to written laws.

Comparative Negligence

A legal doctrine that reduces the amount of damages that a plaintiff can recover in a negligence-based claim, based upon the degree to which the plaintiff's own negligence contributed to the cause of their injuries.

Impostor Rule

A legal principle that specifies when a party may be held liable for fraud or deceit if they knowingly allow another to impersonate them for gain.

Indorsement

The act of signing one's name on the back of a check or other negotiable instrument for the purpose of transferring ownership or providing authorization.