Which of the Following Items Might an IRS Agent Seek

question 80

Multiple Choice

Which of the following items might an IRS agent seek to recharacterize as a constructive dividend?

• A)Payment of interest expense to a corporate shareholder,where the loan bears interest at a market rate,has fixed written terms with a repayment required at a defined future point,and the corporation is not thinly capitalized.
• B)Payment of salary expense to a corporate shareholder's wife,where the wife performs no services for the corporation.
• C)Payment of rental expense to a corporate shareholder,for the use of equipment owned by the shareholder.The equipment is necessary to the corporate business,and the rental cost is similar to that charged by unrelated equipment providers.
• D)All of the above payments could reasonably be considered constructive dividends.

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Definitions:

Respiratory Distress

A medical condition characterized by difficulty breathing, often indicating an underlying health issue or emergency.

Percuss the Thorax

A diagnostic method involving tapping on the chest wall to assess the condition of the heart and lungs.

Oxygen

A chemical element essential for respiration in most living organisms, and necessary for many combustion processes.

Physical Assessment

A comprehensive examination of a patient to evaluate health status and identify possible physical conditions, typically including inspection, palpation, percussion, and auscultation.