Solved by verified expert :599. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #1
The Federal income tax treatment of a corporate restructuring is an extension
of allowing entities to form without taxation.
a.
True
b. False
600. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #2
To ensure the desired tax treatment, parties contemplating a corporate reorganization
should apply for a Regulation from the Treasury.
a.
True
b. False
601. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #3
For corporate reorganizations, the tax laws should be considered while planning
the structure of the reorganization.
a.
True
b. False
602. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #4
Corporate shareholders would prefer to have a gain on a reorganization treated
as a dividend rather than as a capital gain, because of the dividends received
deduction.
a.
True
b. False
603. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #5
For a corporate restructuring to qualify as a tax-free reorganization, the
transaction must have a sound business purpose.
a.
True
b. False
604. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #6
Corporate reorganizations can meet the requirements to qualify as like-kind
exchanges if there is no boot involved.
a.
True
b. False
605. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #7
In 1916, the Supreme Court decided that corporate reorganizations were
substantially continuations of the prior entities and thus should not be
subject to taxation.
a.
True
b. False
606. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #8
In corporate reorganizations, an acquiring corporation using property other
than stock as consideration may recognize gains but not losses on the
transaction.
a.
True
b. False
607. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #9
The gain recognized by a shareholder in a corporate reorganization is the
difference between the realized gain and the boot received.
a.
True
b. False
608. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #10
The gains shareholders recognize as a part of a corporate reorganization may be
treated a dividend to the extent of the corporation’s earnings and profits.
a.
True
b. False
609. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #11
Noncorporate shareholders may elect out of § 368 and recognize losses when property
subject to a liability is distributed to them in a corporate reorganization.
a.
True
b. False
610. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #12
If the target corporation in a reorganization has a deficit in earnings and profits,
any gains recognized by the shareholders are treated as stock redemptions and
not as dividends.
a.
True
b. False
611. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #13
Debt security holders recognize gain when the interest rate on the securities
received is greater than the interest rate on the bonds given up.
a.
True
b. False
612. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #14
The treatment of corporate reorganizations is similar to like-kind exchanges.
a.
True
b. False
613. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #15
In the “Type A” merger, the acquiring corporation must assume all of the
liabilities (known and contingent) of the target, but in the “Type A”
consolidation only those liabilities selected by the new corporation need be
transferred.
a.
True
b. False
614. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #16
The “Type A” corporate reorganization can run afoul of the continuity of
interest doctrine more easily than a “Type C,” because with a “Type A” the Code
does not require that the target shareholders receive common stock of the
acquiring corporation in exchange for their ownership of the target.
a.
True
b. False
615. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #17
The two “Type A” reorganizations are mergers and acquisitions.
a.
True
b. False
616. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #18
In a “Type B” reorganization, the acquiring corporation obtains control by
exchanging common and preferred stock in the same percentages as the target’s
outstanding common and preferred stock.
a.
True
b. False
617. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #19
The “Type B” reorganization requires a continuity of business interest.
Therefore, the acquiring corporation must obtain at least 40% of target
corporation’s stock through the reorganization.
a.
True
b. False
618. CHAPTER
7—CORPORATIONS: REORGANIZATIONS Question TF #20
When substantially all of the assets of the target corporation are received in
exchange for voting stock and selected liabilities, the restructuring can
qualify as a “Type C” reorganization.
a.
True
b. False
