Which of the Following Constitutes Taking an Instrument for Value

question 58

Multiple Choice

Which of the following constitutes taking an instrument for value in order to be considered a holder in due course?

• A) Providing consideration for the instrument.
• B) Providing a bargained-for promise in return for the instrument.
• C) Taking the instrument in exchange for a promise that has already been performed.
• D) Taking the instrument after beginning performance on a promise in return.
• E) All of these.

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Definitions:

Tax Authority

A governmental entity responsible for the administration of taxes, including collection, enforcement, and interpretation of tax laws.

Legislative

Pertaining to the branch of government responsible for creating laws.

Private Letter Rulings

Issued by the IRS, these are written decisions provided to taxpayers, offering guidance on the tax treatment of complex transactions.

Tax Treatment

The specific way tax laws apply to different types of income, expenses, and individuals.