Identify Which of the Following Statements Is False

question 67

Essay

Identify which of the following statements is false.
A) Adjustments to taxable income when computing E&P do not include tax- exempt interest.
B) At formation, a corporation's E&P depends on the amount of capital contributed by the shareholders.
C) For E&P dividend distribution purposes, property as defined in Sec. 317(a) includes money.
D) The function of E&P is to provide a measure of a corporation's economic ability to pay dividends.

• A) Adjustments to taxable income when computing E&P do not include tax- exempt interest.
• B) At formation, a corporation's E&P depends on the amount of capital contributed by the shareholders.
• C) For E&P dividend distribution purposes, property as defined in Sec. 317(a) includes money.
• D) The function of E&P is to provide a measure of a corporation's economic ability to pay dividends.

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Definitions:

Form 1099-B

A form used by brokers and barter exchanges to report proceeds from transactions to the taxpayer and the IRS.

Form 8949

A tax form used by the IRS to report sales and other dispositions of capital assets.

Outstanding Receivables

are amounts owed to a business by its customers for goods or services delivered but not yet paid for.

FMV

Fair Market Value; the price that property would sell for on the open market between a willing buyer and a willing seller.