Which of the Following Statements Is Incorrect

question 111

Multiple Choice

Which of the following statements is incorrect?

• A)A distribution from earnings and profits in excess of stockholder basis is a nontaxable return of capital.
• B)Distributions paid in excess of earnings and profits are nontaxable to the extent of stockholder basis.
• C)A distribution of appreciated property creates a gain to the corporation.
• D)Earnings and profits are conceptually similar to retained earnings.

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Definitions:

Federal Jurisdiction

The legal authority granted to federal courts and agencies to hear and decide cases that involve the U.S. Constitution, federal laws, disputes between states, or parties from different states.

Court of Appeals for the Federal Circuit

A specific United States appellate court with jurisdiction over several areas, including international trade, government contracts, patents, and trademarks.

United States Court of Federal Claims

A federal court that hears monetary claims against the U.S. government.

United States Court of Appeals for Veterans Claims

A federal court that hears appeals from the Board of Veterans' Appeals regarding veterans' benefits.