Identify Which of the Following Statements Is False

question 82

Multiple Choice

Identify which of the following statements is false.

• A)The rules for the recognition of a gain or loss by a corporation that distributes property in redemption of its stock are the same as the rules for property distributions that are not in redemption of stock.
• B)Generally, little or no gain is recognized by the redeeming shareholder in a qualified Sec. 303 redemption.
• C)When a stock redemption is considered a sale of stock by the shareholder, the E&P of the redeeming corporation is reduced by the FMV of the property used to redeem the stock.
• D)Under Sec. 311, a corporation does not recognize a loss when it distributes property that has declined in value.

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Definitions:

Legal Cause

A legally sufficient reason to take certain legal action, such as filing a lawsuit.

Federal District Court

A level of the federal judiciary that has jurisdiction over civil and criminal cases within its area, and is a trial court of the federal court system.

Civil Cases

Legal disputes between individuals or entities over rights, responsibilities, and liabilities not involving criminal charges.

State Court

Courts within a state that interpret and apply the laws of that state, including civil and criminal matters.