Reference no: EM131774917

True and False Questions

A redemption is always "essentially equivalent to a dividend" where a corporation's sole stockholder causes part of his shares to be redeemed by the corporation.

A single shareholder of a C-corporation creates a plan of redemption whereby the C-corporation will redeem his stock for cash. The C-corporation has no accumulated earnings and profits. The redemption will be treated as a sale or exchange triggering capital gain to the shareholder to the extent that the money received exceeds the basis of the shares redeemed.

Interest on tax exempt municipal bonds increases a corporation's Earnings and Profits.

A C-corporation makes a distribution of property with a FMV of $50,000, Basis of$80,000 and a Mortgage of $85,000. The C-corporation recognizes a loss of$35,000.

In 2015, a C-corporation sold stock at a $12,000 gain and also reported a $40,000 capital loss on the disposition of land held for investment. The C-corporation recognized a capital gain of $10,000 in 2014, as well as, an NOL of $20,000. The C-corporation's net capital loss carry forward for 2015 is $18,000.

A C-corporation can only take a charitable deduction for the year the deduction was made.

ABC corporation owns a 90% interest in Apple Corporation. Apple corporation liquidates in 2015 and recognizes gain calculated by the difference between the value of property received and its basis.