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As a Result of a Redemption, a Shareholder's Interest (Direct

question 107

True/False

As a result of a redemption, a shareholder's interest (direct and indirect) in the corporation decreased from 58% to 45%. The redemption qualifies for sale or exchange treatment as a disproportionate redemption.


Definitions:

Total impedance

The overall resistance to the flow of alternating current, combining the effects of resistances, inductive reactance, and capacitive reactance in a circuit.

Applied voltage

The external voltage applied across a component or circuit, causing electric current to pass through it.

Circuit

A closed path through which electric current flows or may flow.

Reactive Power

The portion of electricity that establishes and sustains the electric and magnetic fields in AC operations, measured in volt-amperes reactive (VAR).

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