Identify which of the following statements is true.
A)Stock ownership attributed to a corporation from one of its shareholders cannot be attributed to another of the corporation's shareholders under the Sec. 318 attribution rules.
B)Under the attribution rules relating to stock redemptions, a person who has an option to purchase stock is considered to own the stock.
C)A stock redemption that qualifies as substantially disproportionate is a safe harbor for capital gain treatment.
D)All of the above are true.

Question

Quizplus · Accepted Answer

All the statements provided are true. A) According to Sec. 318 attribution rules, stock ownership attributed to a corporation from one of its shareholders cannot be attributed to another shareholder, preventing circular attribution. B) Under the attribution rules, options to purchase stock are treated as ownership of the stock itself, which can affect control and constructive ownership determinations. C) A stock redemption that is substantially disproportionate qualifies for capital gain treatment, which is a tax advantage under certain conditions, acting as a safe harbor.

Identify Which of the Following Statements Is True