Shauntae Receives a Distribution from a Corporation in Complete Liquidation

question 24

True/False

Shauntae receives a distribution from a corporation in complete liquidation of his ownership interest.Shauntae could report a capital gain,but not a capital loss,from the distribution.

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Definitions:

Investment Contract

A type of security representing an investment of money with an expectation of profit primarily from the efforts of others.

Supreme Court

The highest judicial court in the United States, often the final arbiter of legal and constitutional issues.

Section 14(e)

A provision under the U.S. Securities Exchange Act of 1934 that prohibits fraudulent, deceptive, and manipulative practices in connection with tender offers.

Securities Act of 1934

A U.S. federal law governing the secondary trading of securities (stocks, bonds, and debentures) to protect investors against malpractice.