Identify which of the following statements is true.
A) When boot is received in a Sec. 355 spin- off transaction, the FMV of the boot will be a dividend to the extent of the shareholder's ratable share of the distributing corporation's E&P.
B) A tax- free spin- off coming under Sec. 355 occurs when a parent corporation distributes stock in a controlled subsidiary corporation in exchange for some of its own stock.
C) Tax- free split- offs and spin- offs coming under Sec. 355 require the surrender of shareholder stock.
D) All of the above are false.
Correct Answer:
Verified
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