If the Amount of a Corporate Distribution Is Less Than

question 60

True/False

If the amount of a corporate distribution is less than the amount of the corporate earnings and profits, the return of capital concept does not apply and the shareholders' adjusted basis for the stock remains unchanged.

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Definitions:

Rifting

The process by which the Earth's crust breaks apart, often associated with the formation of new ocean basins and continental breakup.

Continental Crust

The substantially dense segment of Earth's crust which constitutes the major continents, typically being older and more intricate compared to the crust found beneath the oceans.

Ocean-Continent

This term is incomplete without further context, but generally refers to geological processes or interactions taking place between oceanic and continental plates.

Continental Crust

The thick part of the Earth's crust that forms the continents, characterized by a composition that is different from oceanic crust.