Which of the Following Statements Regarding Inversions Is Incorrect

question 83

Multiple Choice

Which of the following statements regarding inversions is incorrect?

• A)The objective of an inversion is to avoid U.S.tax on worldwide income.
• B)In an inversion,a U.S.corporation reorganizes as a foreign corporation.
• C)The IRS will disregard the inversion if the former shareholders of the U.S.corporation continue to own 60% of the foreign corporation's stock.
• D)The IRS will examine whether the foreign corporation conducts substantial business in the foreign country of incorporation to determine if the inversion is valid.

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Definitions:

Self-Disclosure

the act of sharing personal or private information about oneself with others.

Optimum Size

The most efficient, effective, or desirable size for a particular purpose or situation.

Close Relationships

Deeply connected personal associations with significant others, characterized by affection, trust, and mutual support.

Preliminary Treatment

Initial steps or procedures done to prepare for the main treatment, often involving assessment and planning.