Identify Which of the Following Statements Is False

question 94

Multiple Choice

Identify which of the following statements is false.

• A)The AAA balance can be negative, but the shareholder's basis in the S corporation stock cannot be less than zero.
• B)The AAA represents the cumulative income/loss recognized in post-1982 S corporation years.
• C)Nonmoney property distributions made by an S corporation having accumulated E&P are treated differently when determining the corporate-level gain recognized under Sec. 311 than are property distributions made by an S corporation without accumulated E&P.
• D)Tax-exempt income does not increase the AAA but increases the basis of the S corporation stock.

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Definitions:

Cash Discount

A reduction in the price of an item for sale, offered to encourage prompt payment by the buyer.

Complement Rate

The difference between a specific rate and 100%, often used in the context of interest and discount rates.

Discount Date

The specified date on which a discounted transaction must be completed or by which a payment must be made to avail a reduced price.

Due Date

The specified date by which a task, obligation, or payment must be completed or submitted.