Which of the Following Statements Is TRUE Regarding the Disposal

question 3

Multiple Choice

Which of the following statements is TRUE regarding the disposal of shares by a shareholder?

• A) When a shareholder sells shares to other shareholders, the corporation's capital base increases.
• B) The sale of shares to other shareholders is known as a 'buy-back'.
• C) The sale of shares to the corporate treasury is not allowed in the Income Tax Act.
• D) The sale of shares to the corporate treasury may result in a deemed dividend and a capital gain or loss to the shareholder.

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