Identify which of the following statements is true.
A)The distributing corporation's E&P must be reduced by the FMV of nontaxable stock rights distributed to shareholders.
B)A stock redemption can be used to withdraw some assets from a corporation prior to a sale of the business.
C)A shareholder can redeem part of his stock and recognize a capital gain if the corporation has only one shareholder.
D)All of the above are false.

Question

Quizplus · Accepted Answer

A stock redemption can be used to withdraw some assets from a corporation prior to a sale of the business, as it involves the corporation buying back its own shares from shareholders, which can be a way to distribute assets.

Identify Which of the Following Statements Is True