Which of the Following Benefits Does Not Occur When Owner-Shareholders

question 91

Multiple Choice

Which of the following benefits does not occur when owner-shareholders accumulate earnings of their closely-held corporations at the entity level and later sell their stock at an increased value?

• A) Deferral of shareholder tax until the year of sale.
• B) Conversion of ordinary income into capital gain.
• C) Increase in corporate capitalization and reduction in debt-equity ratio.
• D) All of these choices occur when owner-shareholders accumulate earnings of the closely-held corporations.

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Definitions:

Distal Convoluted Tubule

A portion of the nephron in the kidney where significant salt and water reabsorption and secretion of ions into the urine occur, aiding in the regulation of blood pressure, volume, and pH.

Filtrate

The liquid that has passed through a filter, often referring to the fluid that passes through the kidney's nephrons during the process of urine formation.

Hormonally Controlled

Describes processes or activities in the body that are regulated by hormones, substances secreted by glands for regulating bodily functions.

Sodium Ions

Positively charged ions of sodium (Na+), essential for various physiological functions including the regulation of blood pressure and volume.