Identify Which of the Following Statements Is True

question 2

Multiple Choice

Identify which of the following statements is true.

• A)Fringe benefits limited by the more-than-2%-shareholder rule include stock options, group term life insurance premiums, and medical insurance premiums.
• B)A shareholder owning 2% or more of an S corporation's stock, who is also an employee of the corporation, must include all statutory fringe benefits in gross income on his/her individual return.
• C)Section 318 stock attribution rules are used to define 2% or more shareholders of S corporation's stock.
• D)All of the above are false.

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Definitions:

Habituation

A procedure in which a life form diminishes or halts its response to a recurring stimulus as time goes by.

Sensitization

The process where repeated administration of a stimulus results in the progressive amplification of a response.

Higher-order Conditioning

A conditioning process in which a stimulus that's already associated with a reflex becomes associated with a new, neutral stimulus.

Dishabituation

A process in which a previously habituated response reoccurs, typically after the presentation of a novel stimulus.