In Comparing a Qualifying Stock Redemption with a Complete Liquidation,which

question 10

Multiple Choice

In comparing a qualifying stock redemption with a complete liquidation,which of the following statements is incorrect?

• A)Liquidations and qualifying stock redemptions parallel each other in terms of the effect that E & P has on the nature of the gain or loss recognized by the shareholder.
• B)The basis of property acquired in a qualifying stock redemption is equal to the distributing corporation's basis in the property,whereas the basis of property acquired in a complete liquidation is equal to its fair market value on the date of distribution.
• C)Both a qualifying stock redemption and a complete liquidation produce sale or exchange treatment to the shareholder.
• D)A corporation will recognize gain upon the distribution of appreciated property for both a qualifying stock redemption and a complete liquidation,but a corporation will recognize loss upon a distribution of depreciated property only for a complete liquidation.
• E)Section 267 disallows recognition of losses between related parties in a qualifying stock redemption but not in a complete liquidation.

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Definitions:

Chicago School

A school of thought in sociology associated with the University of Chicago, known for its influence on urban sociology, social ecology, and symbolic interactionism.

Macrosociology

Macrosociology is the analysis of large-scale social systems and processes, such as economies and societies, rather than individuals or small groups.

Manifest Functions

The recognized and intended consequences of any social pattern, which contribute to its operation.

Latent Functions

Unintended, unrecognized consequences of social processes, institutions, or actions that may impact society in positive or negative ways.