Identify Which of the Following Statements Is False

question 31

Multiple Choice

Identify which of the following statements is false.

• A)Randy is a shareholder in an S corporation. His stock basis is $10,000 and his basis in a loan he made to the corporation is $3,000. Randy's share of the corporation's ordinary loss for the current year is $11,000. Ignoring the at-risk and passive activity limitations, Randy can deduct the loss in full.
• B)A shareholder's S corporation stock basis will increase when the shareholder acts as guarantor on a corporate indebtedness.
• C)A shareholder's ratable share of the S corporation's ordinary loss reduces the adjusted basis of his/her S corporation stock. Once the basis of the stock is reduced to zero, any loss-passthrough that remains reduces the basis of S corporation debts that are owed to the shareholder.
• D)Debt basis is restored before stock basis.

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Definitions:

Highly Complex Tasks

Tasks that involve multiple, intricate processes and require a high level of cognitive function to solve.

Routine Skills

The technical or procedural abilities and expertise required to perform day-to-day tasks efficiently and effectively.

Dyadic Behaviors

Refers to the interactive patterns or actions that occur between two individuals or entities, often studied within the context of communication, relationship dynamics, or leadership processes.

Performance

The act of carrying out a task or functioning in an effective and efficient manner, often evaluated against a set of standards or expectations.