Identify which of the following statements is true.

A. Two corporations are considered to be brothersister corporations for purposes of the Sec. 304 redemption rules if one shareholder owns more than 50% of each corporation.

B.

The distribution of preferred stock as a stock dividend will result in income or a taxable gain being recognized by the shareholder on the date of the distribution if the stock is Sec. 306 stock.

C.

Corporations without E&P can distribute preferred stock as a stock dividend that is Sec. 306 stock.

D.

All of the above are false.