Which of the Following Is an Incorrect Statement Regarding the Application

question 43

Multiple Choice

Which of the following is an incorrect statement regarding the application of the § 318 stock attribution rules?

• A) An individual is not deemed to own the shares owned by his or her siblings.
• B) Stock owned by an estate is deemed to be owned in full by a beneficiary.
• C) Stock owned by any shareholder owning 50% or more of a corporation's stock is deemed to be owned in full by the corporation.
• D) Stock owned by a partnership is deemed to be owned proportionately by a partner.
• E) None of these.

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Definitions:

Share of Profit

An individual's or entity's portion of the net profits derived from a business venture, investment, or partnership.

Conversion

The wrongful act of taking or using someone else's property without permission, treating it as if it were one's own.

Preferred Stock

A class of share ownership in a corporation that typically confers priorities over common stock in dividend payments and upon liquidation.

Limited Partnership

A business partnership where some owners contribute capital and enjoy profits without participating in day-to-day management, limiting their liabilities.