Which of the Following Statements Regarding Internal Revenue Code Section

question 89

Multiple Choice

Which of the following statements regarding Internal Revenue Code Section 482 is false?

• A) Section 482 applies if related corporations charge each other arms-length transfer prices.
• B) Section 482 is designed to prevent shifting of income from a high tax rate member of a related group to a low tax rate member.
• C) The prevailing attitude of the courts is that the IRS's determination of transfer price should be upheld unless the taxpayer can show that the IRS was arbitrary or capricious.
• D) Section 482 can be used to override artificial transfer prices established between related parties.

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Definitions:

Price of Belts

This refers specifically to the market value or cost at which belts are sold or purchased.

Demand

The desire and ability of consumers to purchase goods or services at a given price.

Hamburgers

A popular food item consisting of a cooked patty of ground meat, usually beef, placed inside a sliced bread roll or bun.

Demand Curve

A graphical representation showing the relationship between the price of a product and the quantity of the product demanded.