Identify Which of the Following Statements Is True

question 85

Multiple Choice

Identify which of the following statements is true.

• A)The FMV of an obligation is used to determine the E&P reduction when a corporation distributes the obligation to its shareholders.
• B)When appreciated property is distributed to shareholders, E&P must be increased by any gain (net of taxes)recognized due to the property distribution.
• C)When appreciated property is distributed in a nonliquidating distribution, the net effect on the distributing corporation's E&P is that it is reduced by the net of the FMV of the property distributed minus the gain (net of federal income taxes)recognized due to the property distribution.
• D)Only B and C above are true.

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Definitions:

Barr Body

A condensed and inactivated X chromosome appearing as a distinctive dense spot in the interphase nucleus of certain cells of female mammals.

Mammalian Female Cell

A cell within a female mammal, which may be specialized, such as an ovum, or somatic, like those forming tissues and organs.

Inactivated X Chromosome

Also known as the Barr Body; a dense body formed from a deactivated X chromosome found in the nuclei of female cells, ensuring dosage compensation between males and females.

Heterozygous

Having two different alleles of a gene, one inherited from each parent, resulting in genetic variation.