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:

Antimony

A brittle, lustrous gray metalloid used in alloys, flame retardants, and electronics, represented by the symbol Sb and atomic number 51.

Silicon

A chemical element with symbol Si and atomic number 14, known for its semiconductor properties in electronics.

Metals

Elements that are typically hard, shiny, malleable, fusible, and ductile, with good electrical and thermal conductivity.

Iron

A durable and abundant metallic element, symbol Fe, atomic number 26, used extensively as a component in steel and various other alloys.