Individual Shareholders Would Prefer to Have a Gain on a Corporate

question 23

True/False

Individual shareholders would prefer to have a gain on a corporate reorganization treated as a capital gain rather than as a dividend, because they can reduce the amount taxable by their basis in the stock involved.

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Definitions:

Undisclosed Principal

A party in a contract whose identity is not revealed to the third party by the agent, allowing the principal to conduct transactions anonymously.

Limited Partners

Investors in a partnership who are not involved in the day-to-day management of the business and whose liability is limited to the amount they have invested.

Insanity

When a person cannot understand the nature or consequences of his acts.

Court Order

A formal declaration made by a court that mandates or forbids certain actions by one or more parties.