Which of the Following Statements Is True of Corporations

question 29

Multiple Choice

Which of the following statements is true of corporations?

• A)Income of all corporations is taxed in the same way that income of partnerships is taxed.
• B)A corporation's charitable contribution deduction is limited to 25 percent of the corporation's taxable income.
• C)Capital losses of a corporation may be deducted from ordinary income, subject to an annual limitation.
• D)If a corporation has a long-term capital loss that is carried back, it is treated as a short-term capital loss.
• E)A corporation may deduct organizational expenditures as they are incurred.

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Definitions:

Appraisers

Professionals who estimate the value of property, such as real estate or fine art, often used for tax, insurance, or sale purposes.

Earnings per Share

A company's profit divided by its number of outstanding shares of stock, indicating the portion of a company's profit allocated to each share.

Cost of Debt

The effective rate that a company pays on its total debt, serving as a measure of the risk and a way to gauge the company's ability to manage its debt effectively.

Shares Outstanding

The total number of shares of a company’s stock that are currently owned by all its shareholders.