Identify Which of the Following Statements Is True

question 22

Multiple Choice

Identify which of the following statements is true.

• A)Perry Corporation, an S corporation, receives $10,000 of dividends from a 25%-owned domestic corporation. Perry is allowed an 80% dividends-received deduction with respect to the distribution.
• B)An NOL is incurred by a C corporation in the current tax year. The C corporation makes an S election for the following tax year. The entire C corporation NOL carryover can be passed through to the S corporation's shareholders at the end of the following tax year.
• C)Tax-exempt interest earned by an S corporation is not reported to its shareholders because it is excluded from the shareholders' gross income.
• D)All of the above are false.

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Definitions:

Student

An individual engaged in learning or attending educational institutions, typically focused on acquiring knowledge and skills.

Nonlinear

Describing a process or relationship not directly proportional or not following a straight line in its rate of change.

Negative

In mathematics and statistics, it refers to a value less than zero.

Strong

Having high physical power, durability, or intensity; often used to describe materials or individuals.