Which of the Following Is Not True of a Forward

question 55

Multiple Choice

Which of the following is not true of a forward triangular cash merger?

• A) It is considered by the IRS as a purchase of target assets.
• B) It is generally followed by a liquidation of the target firm.
• C) Target shareholders must recognize a gain or loss as if they had sold their shares.
• D) The target's tax attributes carry over to the buyer.
• E) Taxes are paid by the target firm on any gain on the sale of its assets and again by shareholders who receive a liquidating dividend.