Ch16TB - 775 Chapter 16 Corporate Distributions in Complete...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
© 2009 CCH. All Rights Reserved. Chapter 16 775 Chapter 16 Corporate Distributions in Complete Liquidations TRUE-FALSE QUESTIONS—CHAPTER 16 A corporation generally recognizes gains and losses on sales of property during a complete liquidation. 1. A corporation generally does not recognize loss on an in-kind distribution of depreciated property in complete 2. liquidation. 3. To receive a fair market value basis in the assets of a purchased subsidiary, the parent corporation must liquidate the 4. subsidiary. Under Code Sec. 331, the shareholder will always recognize a capital gain or a capital loss on the stock upon receipt 5. of a liquidating distribution. If a parent corporation receives a basis in the assets of a subsidiary under Code Sec. 334(b)(1), the subsidiary may be 6. subject to depreciation recapture. A shareholder who recognizes gain or loss under Code Sec. 331 will receive a fair market value basis in assets 7. received as part of the liquidating distribution. A corporation may elect not to recognize gain on the sale of its stock in a subsidiary. 8. Code Sec. 337 applies only to subsidiary corporations. 9. A Code Sec. 338 election is irrevocable. 10. If a shareholder assumes a liability on property in a liquidating distribution, the amount of assumed liability always 11. affects the amount of gain recognized by the liquidating corporation. The liquidating corporation must f le a separate Form 1099-DIV for each shareholder that receives a liquidating 12. distribution of $600 or more during a calendar year. A liquidating distribution may be treated as a dividend to shareholders if the liquidating corporation has accumulated 13. earnings and pro f ts. If a shareholder receives more than a proportionate share of the assets of a liquidating corporation, the excess is 14. treated as a payment received that is attributable to those shareholders who receive less than their proportionate share. A liquidating corporation may recognize gain or loss on the distribution of installment obligations to shareholders. 15. Code Sec. 331 has no application to a distribution in satisfaction of bona f de corporate indebtedness to a shareholder. 16. A parent corporation can satisfy the 80 percent ownership requirement for a Code Sec. 332 liquidation by using 17. constructive ownership rules. Code Sec. 332 does not apply to the liquidation of an insolvent subsidiary. 18. A liquidating corporation cannot recognize loss on distributions to minority shareholders in a Code Sec. 332 19. liquidation. A Code Sec. 338 election must be f led no later than the f fteenth day of the fourth month beginning after the month in 20. which the acquisition date occurs.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
776 CCH Federal Taxation—Comprehensive Topics Chapter 16 © 2009 CCH. All Rights Reserved. MULTIPLE CHOICE QUESTIONS—CHAPTER 16
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/17/2010 for the course ACTG 310 taught by Professor Neal during the Spring '10 term at N.E. Illinois.

Page1 / 12

Ch16TB - 775 Chapter 16 Corporate Distributions in Complete...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online