The Amount of a Corporate Distribution Qualifying for Capital Recovery

question 235

True/False

The amount of a corporate distribution qualifying for capital recovery treatment which exceeds the shareholder- recipient's basis in the stock investment is treated as a capital gain.

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Definitions:

Central Hudson Test

A four-part test used by courts to determine whether government regulation of commercial speech violates the First Amendment.

Commercial Speech

Speech made by businesses about commercial matters, such as the sale of goods and services. It is protected by the First Amendment.

Strict-scrutiny Standard

A form of judicial review that courts use to determine the constitutionality of certain laws by ensuring they serve a compelling governmental interest and are narrowly tailored to achieve their goal.

Laws Examination

A test or series of tests evaluating an individual’s knowledge or competence in areas of law, often as part of legal education or certification.