The Amount of a Corporate Distribution Qualifying for Capital Recovery

question 94

True/False

The amount of a corporate distribution qualifying for capital recovery treatment that exceeds the shareholder- recipient's basis in the stock investment is treated as a capital gain.

---

Definitions:

Allowance for Doubtful Accounts

This is an estimation of the amount of receivables that a company does not expect to actually collect, reflecting potential losses due to customers' inability to pay.

Uncollectible

Uncollectible refers to debts or receivables that are deemed to be impossible to collect, often resulting in a write-off by the business.

Maturity Value

The amount that will be received at the end of a bond or other debt instrument's term.

Face Value

The nominal or dollar value printed on a security or currency, representing its legal value.