Which of the following statements does not describe a tax consequence to shareholders in a complete liquidation?
A)All complete liquidations are taxable to the shareholders.
B)Complete liquidations are taxable to all individual shareholders.
C)Complete liquidations are taxable to all corporate shareholders owning stock of the liquidated corporation representing less than 80 percent or more of voting power and value.
D)Complete liquidations are tax-deferred to corporate shareholders owning stock of the liquidated corporation representing 80 percent or more of voting power and value.

Question

Quizplus · Accepted Answer

This statement is incorrect. Complete liquidations may not be taxable to shareholders if certain criteria are met, such as if the shareholders receive only a return of capital or if the liquidation qualifies as a tax-free reorganization under certain provisions of the Internal Revenue Code.

Which of the Following Statements Does Not Describe a Tax