The Amount of the Dividend on a Nonliquidating Corporate Distribution

question 10

True/False

The amount of the dividend on a nonliquidating corporate distribution of property is the fair falue of the property.

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Definitions:

Shareholder Basis

The amount invested in a company by its shareholders plus any earnings retained by the company.

Earnings and Profits

A measure used for tax purposes, representing a corporation's net income plus or minus certain tax-preferred items.

Cash Dividend

A payment made by a corporation to its shareholders, usually in cash, out of its profits or reserves.

Basis

The amount of investment in property for tax purposes, used to calculate gain or loss upon sale or disposition of the property.