Identify Which of the Following Statements Is True

question 28

Multiple Choice

Identify which of the following statements is true.

• A)A parent corporation cannot liquidate a subsidiary corporation (having but a single class of stock)and avoid recognizing its realized gain unless the parent corporation owns at least 80% of the subsidiary's stock.
• B)The liquidation of a subsidiary corporation must be completed within one tax year to receive nonrecognition treatment.
• C)The provisions permitting a tax-free liquidation of a subsidiary corporation apply to both corporate and noncorporate shareholders of the subsidiary.
• D)All of the above are false.

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Definitions:

Internalize

The process of integrating beliefs, values, standards, or behaviors within oneself without external influence.

Prospective Buyers

Individuals or entities showing interest in purchasing a product or service, potentially becoming customers.

Product Feature

A characteristic or attribute of a product that is intended to offer value or solve a specific problem for the consumer.

Performance Characteristic

Features or aspects of a product or service that determine its ability to meet its intended function or user requirements.