When the Sale of a Business Involves the Sale of Shares

question 4

Multiple Choice

When the sale of a business involves the sale of shares rather than the sale of assets, which of the following is false?

• A)The after-tax proceeds of a share sale for an individual will not be subject to further levels of taxation.
• B)If the proper conditions are met, the vendor may be able to use the capital gain exemption on the sale of the shares.
• C)The share sale will result in capital property for the vendor.
• D)The share sale may result in capital gains and business income for the corporation.

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Definitions:

Basalt Lava

Molten rock that emerges from the earth during a volcanic eruption, characterized by its high iron and magnesium content, and low viscosity.

Flood Basalts

Extensive flows of basaltic lava that cover large areas of land or the ocean floor, resulting from massive eruptions.

Magma Generation

The process by which molten rock (magma) is formed, typically through the melting of the Earth's mantle or crust under certain temperature and pressure conditions.

Dikes

Underground structures formed when magma forces itself across rock layers and solidifies.