Identify which of the following statements is true.

Question

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Statement A is true. This scenario describes a Type F reorganization, where one corporation transfers all of its assets to another corporation in exchange for all of its stock, and the first corporation is liquidated.

Statement B is false. The primary business purpose of a tax-free reorganization should be a legitimate business reason, such as to combine or streamline operations, acquire new assets or business lines, or diversify the company's portfolio, rather than simply minimizing shareholder taxes.

Statement C is false. While following legislative guidelines is important, it is not sufficient on its own to ensure tax-free treatment of a reorganization. The transaction must also meet certain qualification tests, such as the continuity of interest or the continuity of business enterprise tests, and must have a legitimate business purpose.

Identify Which of the Following Statements Is True