T, the sole shareholder of R Corporation, wants to retire.To this end, he sold all of his stock in R to X Corporation, which is a wholly owned corporation of his son.T is assured of exchange treatment on the sale.

Question

Quizplus · Accepted Answer

The sale of stock by T to X Corporation does not automatically assure exchange treatment under tax laws. The treatment of the sale for tax purposes depends on various factors including the structure of the transaction and specific tax regulations, which may result in capital gains treatment rather than exchange treatment.

T, the Sole Shareholder of R Corporation, Wants to Retire