Identify Which of the Following Statements Is True

question 12

Multiple Choice

Identify which of the following statements is true.

• A)If a stock redemption is made by an estate following the decedent's death, the redemption may receive capital gains treatment only if the money is actually used to pay the death taxes.
• B)Attribution rules do not apply to qualified Sec. 303 stock redemptions.
• C)The value of decedent's stock satisfies the Sec. 303 minimum if it is less than 35% of the decedent's gross estate.
• D)All of the above are false.

---

Definitions:

Subsidiary

A company that is completely or partly owned and partly or wholly controlled by another company.

Ownership

The state or fact of owning something, which can involve possessing property, shares in a company, or any asset that grants the owner legal rights and responsibilities.

Horizontal Mergers

A business consolidation that occurs between firms that operate in the same industry or production stage.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, resulting in the average cost per unit of output decreasing with increasing scale.