Identify Which of the Following Statements Is True

question 99

Multiple Choice

Identify which of the following statements is true.

• A)In a tax-free reorganization, the acquiring corporation's holding period for the acquired properties includes the period of time the target corporation held the properties.
• B)In a tax-free reorganization, if the acquiring corporation uses nonmonetary boot property, gains or losses will be recognized by the acquiring corporation.
• C)The receipt of cash by a shareholder results in the recognition of all of his or her realized gain even if the transaction qualifies as a tax-free reorganization.
• D)All of the above are false.

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Definitions:

Common Stock

A type of security representing ownership in a corporation, giving holders a share of the company’s profits via dividends.

Additional Assets

Assets acquired by a company beyond its existing assets, often to expand operations or diversify holdings.

Short-Term Debt

Refers to financial obligations that are due for repayment within one year.

Debt/Equity Ratio

The metric that specifies how a company allocates equity and debt in the financing of its assets.