Question
I need two people to please answer. A shareholder receives stock and cash in an acquisitive reorganization. The shareholder recognizes a gain because of the
I need two people to please answer.
A shareholder receives stock and cash in an acquisitive reorganization. The shareholder recognizes a gain because of the boot (cash) received. What rules determine whether the character of the shareholder's recognized gain is dividend income or capital gain?
A.
The IRS determines the character of a shareholder gain in an acquisitive reorganization based on the plan of reorganization that is required to be furnished to the IRS and states the reorganization is based on the continuity of proprietary interest.
B.
The character of a shareholder gain in an acquisitive reorganization is determined under Sec. 302(b) and Rev. Rul. 93-61, which states the character of the gain can be either dividend income or capital gain.
C.
The character of a shareholder gain in an acquisitive reorganization is determined under Sec. 302(b) and Rev. Rul. 93-61, which states the character of the gain is capital gain for the shareholder to receive preferential tax treatment.
D.
The character of a shareholder gain is only capital gain income when the main reason the reorganization is occurring is because the transferring corporation is insolvent.
A shareholder receives stock and cash in an acquisitive reorganization. The shareholder recognizes a gain because of the boot (cash) received. What rules determine whether the character of the shareholders recognized gain is dividend income or capital gain? The IRS determines the character of a shareholder gain in an acquisitive reorganization based on the plan of reorganization that is required to be furnished to the IRS and states the reorganization is based on the continuity of proprietary interest. The character of a shareholder gain in an acquisitive reorganization is determined under Sec. 302(b) and Rev. Rul. 93-61, which states the character of the gain can be either dividend income or capital gain. The character of a shareholder gain in an acquisitive reorganization is determined under Sec. 302 (b) and Rev. Rul. 93-61, which states the character of the gain is capital gain for the shareholder to receive 302 preferential tax treatment. The character of a shareholder gain is only capital gain income when the main reason the reorganization is occurring is because the transferring corporation is insolvent
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