Identify Which of the Following Statements Is True

question 99

Multiple Choice

Identify which of the following statements is true.

• A)In a tax-free reorganization, the acquiring corporation's holding period for the acquired properties includes the period of time the target corporation held the properties.
• B)In a tax-free reorganization, if the acquiring corporation uses nonmonetary boot property, gains or losses will be recognized by the acquiring corporation.
• C)The receipt of cash by a shareholder results in the recognition of all of his or her realized gain even if the transaction qualifies as a tax-free reorganization.
• D)All of the above are false.

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Definitions:

Incorporation

The process of legally declaring a corporate entity as separate from its owners, providing limited liability, tax advantages, and other benefits.

S-Corporation

A type of corporation in the United States that elects to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.

Electric Company

A business entity that generates, transmits, distributes, or sells electricity to consumers and businesses.

Corporate Veil

The Corporate Veil is a legal concept that separates the actions and liabilities of a corporation from those of its shareholders, directors, and officers, protecting personal assets from business debts and obligations.