Which of the Following Statements Regarding "Type B" Reorganizations Is

question 116

Multiple Choice

Which of the following statements regarding "Type B" reorganizations is true?

• A)Since a parent-subsidiary relationship is created, the tax attribute carryover limitations are problematic.
• B)The acquisition of liabilities can cause problems when the liabilities of the target are greater than 20% of the total consideration and the acquiring owned target stock prior to the "Type B" reorganization.
• C)The acquisition of common and preferred target stock by the acquiring can be directly from the shareholders or from the target corporation.
• D)The acquiring corporation must distribute the target stock it obtains to its shareholders. The acquiring shareholders do not always have to turn in acquiring stock in exchange for the target stock.
• E)All of the above statements are true.

---

Definitions:

Legal System

A legal system is a mechanism for creating, interpreting, and enforcing laws in a given jurisdiction, influencing the way justice is administered and how rights are protected.

Socialist Country

A nation whose government practices socialism, aiming for collective or governmental ownership and administration of the production and distribution of goods.

Redistribution of Income

Government policies or mechanisms aimed at adjusting the distribution of income among a population to achieve social or economic objectives.

Wealthy Classes

Social groups consisting of individuals or families that possess significantly higher amounts of capital, assets, or wealth compared to the average population.