Identify Which of the Following Statements Is True

question 50

Multiple Choice

Identify which of the following statements is true.

• A)Beach Corporation, an S corporation, has gross receipts of $240,000; taxable income of $120,000; passive investment income of $100,000; and expenses directly attributable to the passive investment income of $20,000. The corporation's excess net passive income is $32,000.
• B)The built-in gains tax applicable to S corporations can be avoided if the property is held for ten years.
• C)An S corporation generally will not owe the built-in gains tax if the corporation has never been a C corporation.
• D)All of the above are true.

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Definitions:

Cognitive Dissonance

The mental discomfort experienced by a person who holds contradictory beliefs, ideas, or values at the same time.

Group Synergy

The phenomenon in which the collective output, results, or performance of a group is greater than the sum of the individual efforts.

Tuckman's Theory

A model of group development that outlines stages of forming, storming, norming, performing, and adjourning.

Reforming

The process of making changes to something with the aim to improve it, often in the context of social, political, or organizational structures.