Question 21(4 points)

Code Sec. 337 applies only to subsidiary corporations.

Question 21 options:

	a) True
	b) False

Question 22(4 points)

To receive a fair market value basis in the assets of a purchased subsidiary, the parent corporation must liquidate the subsidiary.

Question 22 options:

	a) True
	b) False

Question 23(4 points)

A Code Sec. 338 election is irrevocable.

Question 23 options:

	a) True
	b) False

Question 24(4 points)

A parent corporation can satisfy the 80 percent ownership requirement for a Code Sec. 332 liquidation by using constructive ownership rules.

Question 24 options:

	a) True
	b) False

Question 25(4 points)

Liquidations and stock redemptions that are treated as exchanges have many similar tax consequences to the corporation and its shareholders. These include the following, except:

a. The corporation must recognize depreciation recapture.

b. The corporation may recognize a loss on the distributed property.

c. The shareholder receives a fair market value basis in the distributed property.

d. E&P is either reduced or eliminated.

Question 25 options:

a)

A

b)

B

c)

C

d)

D