Question
I can't seem to get through the second part of this problem. (the explanations) Part 1 Indicate whether each of the following statements about a
I can't seem to get through the second part of this problem. (the explanations)
Part 1
Indicate whether each of the following statements about a liquidation is true or false. If the statement is false, explain why.
a. | Liabilities assumed by a shareholder when a corporation liquidates reduce the amount realized by the shareholder on the surrender of his or her stock. |
b. | The loss recognized by a shareholder on a liquidation generally is characterized as an ordinary loss. (Assume the corporation is not a small business or insolvent subsidiary corporation.) |
c. | A shareholder's basis for property received in a liquidation is the same as the property's basis in the liquidating corporation's hands. |
d. | The holding period for property received in a liquidation includes the period of time it is held by the liquidating corporation. |
e. | The tax attributes of a liquidating corporation are assumed ratably by its shareholders. |
f. | A parent corporation can elect to recognize gain or loss when it liquidates a controlled subsidiary corporation. |
g. | A liquidating subsidiary recognizes no gain or loss when it distributes its property to its parent corporation. |
h. | A parent corporation's basis for the assets received in a liquidation where gain is not recognized remains the same as it was to the liquidating subsidiary corporation. |
Select the appropriate answer below. (If the answer is "true", leave the explanation column blank.)
Part 2 - Choose and explanation for each false statement
I. | It generally is a capital loss. |
II. | It generally is an ordinary loss. |
III. | It generally is the property's FMV. |
IV. | It generally starts on the day of liquidation. |
V. | It generally starts on the day following the liquidation date. |
VI. | The attributes generally disappear. |
VII. | Nonrecognition of gain or loss is mandatory if the Sec. 332 and 337 requirements are met. |
VIII. | Nonrecognition of gain or loss is mandatory if the Sec. 332 and 337 requirements are not met. |
My Answers were:
A.True
B. False I.
C. False III.
D. False IV.
E. False VI.
F. False VII.
G. True
H. True
All of my True/False answers were marked correct, but some of my explanations are not.
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