In an S Corporation, Shareholders

question 629

Multiple Choice

In an S corporation, shareholders

• A) are taxed only on dividends.
• B) are only taxed on salaries.
• C) are taxed on their proportionate share of earnings.
• D) may allocate income among themselves in order to consider special contributions.

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Definitions:

Rescission

The legal act of voiding a contract and returning the parties involved to their states prior to the contract, as if the contract had never existed.

Scienter

Knowledge of wrongdoing or fraudulent intent, especially as a component to proving certain types of fraud.

False Statement

An untrue assertion presented as a fact, intentionally or unintentionally, which could mislead or deceive others.

Promissory Statements

Brief declarations or assertions made with the intention of influencing the expectations or actions of others, often found in contracts or agreements.