Identify which of the following statements is false.
A)A stock redemption is treated as a sale or exchange only if the shareholder's ownership of one particular class of stock is terminated.
B)An individual is not considered to own stock owned by a brother under the family attribution rules of Sec. 318.
C)An individual is considered to own the stock owned by his parents, children, spouse, and grandchildren under the family attribution rules of Sec. 318.
D)A person who has an option to purchase stock is considered to own the stock.

Question

Quizplus · Accepted Answer

A stock redemption is treated as a sale or exchange regardless of whether the shareholder's ownership of one particular class of stock is terminated. The tax treatment depends on the specific circumstances of the redemption, such as whether it is a complete or partial redemption, and whether it is treated as a dividend or a capital gain. The other statements are generally true under the family attribution rules and stock ownership rules.

Identify Which of the Following Statements Is False