Identify which of the following statements is true.
A)The holding period for property received by a shareholder in a nonliquidating distribution begins on the day after the distribution.
B)When making a nonliquidating distribution, a corporation recognizes gains and losses.
C)When making a nonliquidating distribution, the corporation's E&P is reduced by the property's FMV even though the property's basis is greater than its FMV.
D)All of the above are false.

Question

Quizplus · Accepted Answer

B is false because a corporation does not recognize gains and losses when making a nonliquidating distribution. 
C is false because the corporation's E&P is reduced by the property's basis, not its FMV. 
Therefore, A is the only statement that is true.

Identify Which of the Following Statements Is True