Tax Drill Partial Liquidations Indicate whether the following statements are "True" or "False" regarding partial liquidations. a. To qualify as a partial liquidation, the distribution must result in a genuine contraction of the business of the corporation. b. C. A safe-harbor rule, the termination of a business test, will satisfy the not essentially equivalent to a dividend requirement. A partial liquidation is a distribution that (1) is equivalent to a dividend and (2) is both pursuant to a plan and made within the plan year or within the succeeding taxable year