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:

Statute Of Repose

A legal provision that limits the time within which an action can be brought, but unlike statutes of limitations, it is not tied to the discovery of harm but rather to the occurrence of a specific event, typically related to the completion of some act or process.

Consequential Damages

Damages that do not directly flow from an act but result as a secondary consequence, often relating to lost profits or revenue.

Public Policy

A system of laws, regulatory measures, courses of action, and funding priorities concerning a given topic promulgated by a governmental entity or its representatives.

Breach Of Warranty

The failure to fulfill the terms of a promise or guarantee made about the quality or durability of a product or service.