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:

Principal Types

Main or leading categories or kinds within a larger group or system.

Stress

A feeling of emotional or physical tension resulting from any event or thought that makes one feel frustrated, angry, or nervous.

Frustration

A negative emotional state that arises when one is prevented from reaching a desired outcome or goal.

Anxiety

An emotion of concern, anxiety, or discomfort regarding something whose result is not known.