Identify Which of the Following Statements Is True

question 32

Multiple Choice

Identify which of the following statements is true.

• A)The basic accounting method elections that are used by the seller in intercompany transactions do not override the intercompany transaction rules.
• B)P and S are members of an affiliated group that has filed consolidated tax returns for a number of years. The sale of inventory by P, which was acquired from S in an intercompany transaction, outside the affiliated group triggers the restoration of gain by S.
• C)Last year, P, S, and T Corporations have filed consolidated tax returns for a number of years. Last year P Corporation sold land (a Sec. 1231 asset)to T at a $75,000 profit. The gain was deferred by P in last year's consolidated tax return. P sold the T stock to Mike on June 1 of this year. The stock sale will require P to report in its income the gain that was deferred on the land sale.
• D)All of the above are true.

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Definitions:

Due Process

A constitutional principle that requires governments to respect all of a person's legal rights, rather than just some or part of them, especially the rights to a fair and public trial.

Unreasonable Searches

Searches conducted by authorities without a warrant or probable cause, violating constitutional rights.

Shareholder

An individual or entity that owns shares in a company and therefore has an interest in its operation and profitability.

Corporate Owner

An individual or entity that possesses ownership shares in a corporation, granting them certain rights and responsibilities.