Identify which of the following statements is false.
A. The depreciation recapture provisions in Secs. 1245 and 1250 override the Sec. 337(a) nonrecognition rule if a controlled subsidiary corporation is liquidated into its parent corporation.
B. Liquidating distributions made to minority shareholders in the tax-free liquidation of a controlled subsidiary corporation are treated by the liquidating corporation in the same way as nonliquidating distributions.
C. Sec. 337(a) provides that the liquidating corporation recognizes no gain or loss on the distribution of property to the 80% distributee in a complete Sec. 332 liquidation.
D. A corporation that distributes the stock of a subsidiary may elect to treat the distribution as a sale of the subsidiary's assets.
Answer: A
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Barnes Company purchased $50,000 of 8% bonds at par. The bonds mature in six years and are classified as a held-to-maturity security. Which of the following is the correct journal entry to record the receipt of the usual semiannual interest payment?
A. debit Cash, $2,000; credit Interest Revenue, $2,000. B. debit Unrealized Gain-Equity, $2,000; credit Cash, $2,000. C. debit Cash, $4,000; credit Long-Term Investments-HTM, $4,000. D. debt Cash, $2,000; credit Long-Term Investments-HTM, $2000. E. debit Cash, $4,000; credit Unrealized Gain-Equity, $4,000.
A possessor of non-negotiable paper has the same rights as the person who made the original contract
a. True b. False Indicate whether the statement is true or false
Smalltown has two family-owned hardware stores that have been in business for years. Major Hardware decides that Smalltown would be a good place to build one of its superstores. Major opens, advertising unbelievably low prices; in fact, at below cost
Because Major owns stores nationally, it is able to keep prices extremely low until both of the family-owned stores have to go out of business because they cannot compete. After Major is the only hardware store in town, it raises its prices enough to make up for its former losses and to make some additional profit. Discuss this behavior in relation to antitrust law.
When there is a significant difference between the service customers receive and the service the firm promotes, the firm has a ________ gap.
A. knowledge B. communications C. standards D. social expectations E. delivery