Which of the Following Is Not True of a Taxable

Multiple Choice

Which of the following is not true of a taxable purchase of stock?

A) Taxable transactions usually involve the purchase of the target's voting stock with acquirer stock.
B) Taxable transactions usually involve the purchase of the target's voting stock, because the purchase of assets automatically will trigger a taxable gain for the target if the fair market value of the acquired assets exceeds the target firm's tax basis in the assets.
C) All stockholders are affected equally in a taxable purchase of assets.
D) The target firm does not pay any taxes on the transaction.
E) The effect of the tax liability will vary depending on the individual shareholder's tax basis.