Identify Which of the Following Statements Is True

question 23

Multiple Choice

Identify which of the following statements is true.

• A)A split-off Type D reorganization occurs when part of the assets of one corporation are transferred to a controlled corporation in exchange for its stock, and shares of the controlled corporation's stock are distributed to all of the distributing corporation's shareholders without having them surrender any of their stock in the distributing corporation.
• B)In a Type D reorganization, the existence of a good corporate business purpose is necessary before the stock of a controlled subsidiary can be distributed to the shareholders of the distributing corporation.
• C)A distribution of a controlled corporation's stock can be a tax-free Type D reorganization, even if none of the distributing corporation's assets are transferred to the controlled corporation.
• D)All of the above are false.

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Definitions:

Damages

Monetary compensation required to be paid by an individual or organization to another for loss or injury.

Entry Restrictions

Regulations or requirements that limit or control the access of new competitors into a market or industry.

Revenue Function

A mathematical relation that calculates the total revenue generated by selling goods or services, typically as a function of price or quantity.

Total Profits

The total income a business has after subtracting all costs and expenses from total revenue.