Which of the Following Statements Is True

question 85

Multiple Choice

Which of the following statements is true?

• A) C corporation shareholders are taxed based on their proportionate share of income.
• B) Shareholders in a C corporation can use C corporation losses to offset shareholder income from other sources.
• C) Distributions of C corporation income are not taxable.
• D) C corporation losses remain in the C corporation and can offset capital gain income from other years.

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Definitions:

Existing Businesses

Companies or enterprises that have been operational for a period of time and are not newly established.

Franchises

Business models where individuals can buy the rights to open and operate a location of a larger company.

Capital Intensive

A characteristic of businesses that require large investments in capital assets, like machinery and equipment, to produce goods or services.

Labor Intensive

Describes a process or industry that requires a large amount of labor to produce its goods or services, compared to the amount of capital used.