Which of the Following Statements Best Describes the Priority of the Tax

question 79

Multiple Choice

Which of the following statements best describes the priority of the tax treatment of a distribution from a corporation to a shareholder?

• A)The distribution is a dividend to the extent of the corporation's E&P, then a return of capital, and finally gain from sale of stock.
• B)The distribution is a return of capital, then a dividend to the extent of the corporation's E&P, and finally gain from sale of stock.
• C)The distribution is a return of capital, then gain from sale of stock, and finally a dividend to the extent of the corporation's E&P.
• D)The shareholder can elect to treat the distribution as either a dividend to the extent of the corporation's E&P or a return of capital, followed by gain from sale of stock.

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Definitions:

Cost Of Speech

can imply the socioeconomic or personal consequences associated with expressing one's opinions or statements.

Sense Of Entitlement

A belief or attitude that one deserves certain privileges or special treatment, often without consideration for others or the circumstances.

Innovation

The introduction of new ideas, methods, or products.

Entrepreneurship

The process of designing, launching, and running a new business, typically starting as a small business, such as a startup, and aiming to achieve growth and profit.