Identify Which of the Following Statements Is False

question 83

Multiple Choice

Identify which of the following statements is false.

• A)The acquiring corporation does not recognize gains or losses under Sec. 1001 when it transfers noncash boot property to the target corporation or its shareholders.
• B)Gain recognized by a shareholder in a tax-free reorganization may be characterized as a dividend.
• C)If no gain or loss is recognized by a stock or security holder in a tax-free reorganization, the stock or securities received take a substituted basis equal to the basis of the shares or securities surrendered.
• D)Tax-free reorganizations generally do not involve actual redemptions of the stock of the target corporation's shareholders.

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Definitions:

Economic Investment

The expenditure on capital goods used to produce other goods or services in the future, contributing to a country's productive capacity.

Fermentation System

A biological process using microorganisms to convert organic materials into alcohol, gases, or acidic products.

Entrepreneur

An individual who creates a new business, bearing most of the risks and enjoying most of the rewards, often seen as an innovator and a source of new ideas, goods, services, and business/or procedures.

Production Possibility Frontier

A graph showing the highest possible combinations of two goods that can be made using existing resources and technology.