Identify Which of the Following Statements Is True

question 28

Multiple Choice

Identify which of the following statements is true.

• A)The exchange of stock for services rendered is not a taxable transaction.
• B)The repeal of Sec. 351 would result in more existing businesses being incorporated.
• C)Section 351 was enacted to allow taxpayers to incorporate without incurring adverse tax consequences.
• D)All of the above are false.

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Definitions:

Dividend Amount

Dividend amount is the sum paid to shareholders out of a company's earnings, typically on a per-share basis.

Dividend Yield

The annual dividend payment divided by the current market price of the stock, expressing the dividend as a percentage of the stock price.

Tax Deductible

Expenses that can be subtracted from gross income to reduce taxable income, ultimately decreasing the tax owed.

Dividends

Money distributed to shareholders by a corporation, usually from the company's profits.