Which of the Following Statements Regarding S Corporations Is True

question 58

Multiple Choice

Which of the following statements regarding S corporations is true?

• A) If an S corporation's election terminates, the corporation is forced to liquidate.
• B) All states treat the S corporation as a taxable corporation for corporate franchise tax purposes.
• C) Generally, the transfer of property by a controlling shareholder to a newly-formed S corporation in exchange for stock is a nontaxable event.
• D) The owners of a new business should be indifferent between operating as an S corporation and a partnership.

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Definitions:

Pectoral Girdle

The skeletal framework of the shoulder region that supports arm movement, consisting of the scapulae and clavicles.

Clavicles

Long bones that serve as a strut between the shoulder blade and the sternum, also known as collarbones.

Scapulae

The pair of flat bones located on each side of the upper back, commonly known as shoulder blades.

Glenoid Cavity

A shallow depression on the scapula that articulates with the head of the humerus to form the shoulder joint.