Identify Which of the Following Statements Is False

question 29

Multiple Choice

Identify which of the following statements is false.

• A) Nonmoney property distributions made by an S corporation having accumulated E&P are treated differently when determining the corporate- level gain recognized under Sec. 311 than are property distributions made by an S corporation without accumulated E&P.
• B) Tax- exempt income does not increase the AAA but increases the basis of the S corporation stock.
• C) The AAA represents the cumulative income/loss recognized in post- 1982 S corporation years.
• D) The AAA balance can be negative, but the shareholder's basis in the S corporation stock cannot be less than zero.

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