Rover Corporation Is a Regular Corporation That Has Not Elected

question 93

Multiple Choice

Rover Corporation is a regular corporation that has not elected S corporation status.In 1992,Rover earns $100,000; in 1993,Rover distributes $50,000 to its shareholders.Which of the following best describes the tax consequences to Rover and its shareholders?

• A) The shareholders are taxed on $100,000 in 1992; Rover is not subject to tax.
• B) Rover is taxed on $100,000 in 1992; the shareholders are not subject to tax.
• C) Rover is taxed on $100,000 in 1992; the shareholders are taxed on $50,000 in 1992.
• D) Rover is taxed on $100,000 in 1992; the shareholders are taxed on $50,000 in 1993.
• E) Neither Rover nor its shareholders are subject to tax.

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Definitions:

Mutagen

A chemical or physical agent that interacts with DNA and causes a mutation.

LC50

The lethal concentration of a substance that causes death in 50% of a population of test organisms within a specified period, a common measure in toxicity tests.

Teratogens

Agents or factors that can cause the development of physical defects in an embryo or fetus during pregnancy.

Birth Defects

Birth defects are physical or biochemical abnormalities present at birth that can result in physical, mental, or emotional disability or dysfunction.