Which of the Following Statements Does Not Describe a Motivation

question 21

Multiple Choice

Which of the following statements does not describe a motivation by the buyer or seller in the acquisition or sale of a company?

• A) Sellers generally prefer to sell assets in a tax-deferred reorganization to avoid higher tax rates imposed on gains from the sale of non-capital assets.
• B) Sellers generally prefer to sell stock because they can recognize capital gain on the sale taxed at preferential rates.
• C) Buyers generally prefer to buy assets because they can take a tax basis in the assets acquired equal to the assets' fair market value.
• D) Buyers generally prefer to buy stock because they can take a tax basis in the underlying assets of the company acquired equal to the assets' fair market value.

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