4.2.2 Basic Quiz -- Asset Sale with Unitrust

When a corporation sells its assets in anticipation of liquidation, it does not incur a capital gains tax on the sale.

True False

Most sellers of a corporation prefer an asset sale to a stock sale.

True False

Most buyers of a corporation prefer a stock sale to an asset sale.

True False

It may be possible to avoid one level of tax when liquidating a corporation.

True False

By transferring the corporate stock into a charitable remainder trust before the corporation sells its assets, the corporation can bypass capital gains tax on the sale of its assets.

True False

All shareholders must agree to create a charitable remainder trust in order to bypass capital gains tax at the shareholder level.

True False

When a corporation liquidates, it pays capital gains tax at the individual capital gains rate.

True False

With a C corporation there may be two levels of tax on the same property.

True False

C corporations offer the protection of limited liability to their shareholders.

True False

If a shareholder chooses to transfer only part of his or her stock into a CRT, the charitable tax deduction will offset some or all of the capital gain recognized on the stock sold for cash.