Blast Corporation Manufactures Purses and Make- Up Kits

Blast Corporation manufactures purses and make- up kits. The corporation decides to quit manufacturing purses and distributes the assets associated with this division to its shareholders. The distribution of the these assets will be treated as a partial liquidation if

A) the corporation discontinues the line of business and the transaction is "essentially equivalent to a dividend."
B) the distribution is "not essentially equivalent to a dividend" and is made within the year a plan of liquidation is adopted or within the succeeding year.
C) the distribution is made within 24 months of the adoption of a plan of liquidation and the transaction is "not essentially equivalent to a dividend."
D) the corporation so elects.

Correct Answer:

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