Identify Which of the Following Statements Is True

question 78

Multiple Choice

Identify which of the following statements is true.

• A)A tax-free spin-off coming under Sec. 355 occurs when a parent corporation distributes stock in a controlled subsidiary corporation in exchange for some of its own stock.
• B)Tax-free split-offs and spin-offs coming under Sec. 355 require the surrender of shareholder stock.
• C)When boot is received in a Sec. 355 spin-off transaction, the FMV of the boot will be a dividend to the extent of the shareholder's ratable share of the distributing corporation's E&P.
• D)All of the above are false.

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Definitions:

Demote

The process of reducing an item's rank or position within a hierarchical structure, such as in an organization or a document outline.

Odd Page

A page in a document that is numbered with an odd number, typically found on the right side when printed and bound.

Section Break

A feature in word processing software that allows users to divide documents into sections, each with its own layout and formatting settings.

Level 1 Heading

The highest level of heading in a document, used for the main titles or sections, indicating the primary content divisions.