Identify Which of the Following Statements Is False

question 87

Multiple Choice

Identify which of the following statements is false.

• A)When determining the use of an NOL carryover following a change of ownership, the old loss corporation and the new loss corporation may be the same for Sec. 382 purposes.
• B)A new loss corporation that does not continue the business enterprise of the old loss corporation during the two-year period beginning on the date of the stock ownership change cannot use the net operating loss carryover.
• C)One advantage of a tax-free reorganization is that losses realized as part of a tax-free reorganization are not recognized.
• D)For purposes of Sec. 382, ownership changes are tested any time a 5% shareholder has a stock transaction affecting his ownership.

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Definitions:

Transfer Pricing

The pricing of goods, services, or intangible properties transferred within divisions of a company or between subsidiaries.

Income Tax Rate

The percentage of income paid to the government as tax.

Variable Cost

Costs that change in proportion to the level of goods or services produced or sold.

Full Cost

The total expense associated with producing a product or service, including direct costs, indirect costs, and overhead.