Identify Which of the Following Statements Is True

question 78

Multiple Choice

Identify which of the following statements is true.

• A)A tax-free spin-off coming under Sec. 355 occurs when a parent corporation distributes stock in a controlled subsidiary corporation in exchange for some of its own stock.
• B)Tax-free split-offs and spin-offs coming under Sec. 355 require the surrender of shareholder stock.
• C)When boot is received in a Sec. 355 spin-off transaction, the FMV of the boot will be a dividend to the extent of the shareholder's ratable share of the distributing corporation's E&P.
• D)All of the above are false.

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Definitions:

Discovering

The process of uncovering or finding out new information, facts, or principles through investigation or experimentation.

Cognitive Therapy

A type of psychotherapy aimed at changing negative patterns of thinking, which can contribute to emotional distress and mental disorder.

Acceptance

The act of receiving or taking something offered, or the process of embracing someone or something as adequate or suitable.

Genuineness

Authenticity in one's actions and feelings, often considered crucial in therapeutic settings for effective healing and connection.