Identify Which of the Following Statements Is True

question 94

Multiple Choice

Identify which of the following statements is true.

• A)To have a bona fide partial liquidation, a firm must continue to conduct a qualified trade or business, which it had conducted for a period of more than three years prior to the redemption.
• B)To qualify as a partial liquidation, a distribution must result in a bona fide contraction of the corporate business at the corporate level.
• C)A partial liquidation of a corporation must be pro rata.
• D)All of the above are false.

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Definitions:

Marginal Social Cost

The total cost to society of producing one additional unit, including both private costs and any external costs.

Marginal Social Benefit

The extra advantage to the community that comes from creating or using an additional unit of a product or service.

Pollution

It refers to the introduction of harmful substances or products into the environment, causing adverse effects on living beings and ecosystems.

External Costs

Costs that are not reflected in the market price of goods or services, often borne by society.