Which of the following statements is correct with respect to a partial liquidation? The genuine contraction of a corporate business requirement is an objective test that taxpayers can rely upon with certainty. The distribution of proceeds from the sale of excess inventory to shareholders in exchange for part of their stock will not satisfy the not essentially equivalent to a dividend test. A stock redemption pursuant to a partial liquidation cannot be pro rata with respect to the shareholders. The termination of a business test requires that the distributing corporation actively conducted at least three trades or businesses for at least five years. None of the above.

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01-05-2020
Business

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Which of the following statements is correct with respect to a partial liquidation? The genuine contraction of a corporate business requirement is an objective test that taxpayers can rely upon with certainty. The distribution of proceeds from the sale of excess inventory to shareholders in exchange for part of their stock will not satisfy the not essentially equivalent to a dividend test. A stock redemption pursuant to a partial liquidation cannot be pro rata with respect to the shareholders. The termination of a business test requires that the distributing corporation actively conducted at least three trades or businesses for at least five years. None of the above.

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oyesobas912 oyesobas912 · Answer 1 · 2020-05-02T02:14:38+02:00

Answer:The distribution of proceeds from the sale of excess inventory to shareholders in exchange for part of their stock will not satisfy the not essentially equivalent to a dividend test.

Explanation:

Which of the following statements is correct with respect to a partial liquidation?The distribution of proceeds from the sale of excess inventory to shareholders in exchange for part of their stock will not satisfy the not essentially equivalent to a dividend test.