Which of the Following Statements Regarding S Corporations Is True

question 58

Multiple Choice

Which of the following statements regarding S corporations is true?

• A) If an S corporation's election terminates, the corporation is forced to liquidate.
• B) All states treat the S corporation as a taxable corporation for corporate franchise tax purposes.
• C) Generally, the transfer of property by a controlling shareholder to a newly-formed S corporation in exchange for stock is a nontaxable event.
• D) The owners of a new business should be indifferent between operating as an S corporation and a partnership.

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Definitions:

LOM

Limitation of Motion, a term used to describe the restricted movement of a limb or joint.

Analgesic

A category of drugs used to achieve pain relief; also known as painkillers.

Pain

A negative sensory and emotional reaction related to either existing or impending bodily injury, or explained as if such injury has occurred.

Electromyography

A diagnostic procedure to assess the health of muscles and the nerve cells that control them (motor neurons) by recording the electrical activity produced by skeletal muscles.