Control of the Target Corporation Must Be Obtained in All

question 47

Multiple Choice

Control of the target corporation must be obtained in all reorganizations in order to avoid recognizing income.In reorganizations other than a type "D," what constitutes "control" following a reorganization?

• A)Owning 80 percent or more of voting stock and 80 percent or more of nonvoting stock
• B)Owning 50 percent of all assets
• C)Owning 80 percent of total stock
• D)All of the above answers are false.

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Definitions:

Beneficiaries

Individuals or entities entitled to benefits or proceeds from a will, insurance policy, trust, or other financial instruments.

Endowments

Funds or property donated as a source of income, where the principal is typically kept intact in perpetuity or for a defined time period.

Investment Income

Refers to the money earned from various investments, including dividends, interest, or capital gains from securities, real estate, and other assets.

Not-for-profit Organization

An entity that operates for purposes other than generating profit, focusing on social, educational, charitable, or other activities.