Which of the Following Statements Is True

question 26

Multiple Choice

Which of the following statements is true?

• A)All stock redemptions are treated as exchanges for tax purposes.
• B)A stock redemption not treated as an exchange will automatically be treated as a taxable dividend.
• C)All stock redemptions are treated as dividends if received by an individual.
• D)A stock redemption is treated as an exchange only if it meets one of three stock ownership tests described in the Internal Revenue Code.

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Definitions:

Discrimination

The unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or gender.

Homosexuality

The romantic or sexual attraction or behavior between members of the same sex or gender.

Ingroup Favoritism

Preferential treatment of, or more favorable attitudes toward, people in one’s own group.

Human Resources

The department within a business that deals with hiring, administration, and training of personnel.