Identify Which of the Following Statements Is True

question 48

Multiple Choice

Identify which of the following statements is true.

• A) The built- in gains tax applicable to S corporations can be avoided if the property is held for ten years.
• B) An S corporation generally will not owe the built- in gains tax if the corporation has never been a C corporation.
• C) 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.
• D) All of the above are true.

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A metric used to evaluate the risk-adjusted return of an investment portfolio, indicating how much excess return you receive for the extra volatility of holding a riskier asset.