Identify Which of the Following Statements Is False

question 54

Multiple Choice

Identify which of the following statements is false.

• A)An individual taxpayer, who is assessed an additional payment of money based on stock ownership in a corporation whose stock is redeemed in a complete liquidation, may recognize a capital loss to the extent of the additional assessment.
• B)The open transaction doctrine defers the shareholder's gain or loss from a liquidation until the assets can be valued by sale or collection.
• C)The open transaction doctrine as applied to complete corporate liquidations refers to the numerous planning alternatives available when liquidating a corporation.
• D)The IRS asserts that the open transaction doctrine should be used only in extraordinary circumstances.

---

Definitions:

Terminated By Operation

Describes a condition or method by which something concludes automatically due to the existence of certain predetermined conditions.

Real Estate Broker

A real estate broker is a licensed professional who arranges real estate transactions by matching buyers and sellers, typically earning a commission for their services.

Undisclosed Principal

A person or entity that remains unknown to the third party in a contractual agreement, usually represented by an agent.

Disclosed Principal

In an agency relationship, a principal whose identity is known to the third party at the time of entering into a contract with the agent.