Which of the Following Is NOT Considered a Related Party

question 46

Multiple Choice

Which of the following is NOT considered a related party for the purpose of limitation on accruals to related parties?

• A) Spouse when the taxpayer is an individual.
• B) A partner when the taxpayer is a partnership.
• C) Brother when the taxpayer is an individual.
• D) A minority shareholder when the taxpayer is a corporation.
• E) All of these are related parties.

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Definitions:

Noncontrolling Interest

A portion of equity in a subsidiary not attributable, directly or indirectly, to the parent company, reflecting minority shareholders' claim on assets and earnings.

Markup

The difference between the cost of a good or service and its selling price, represented as a percentage of the cost.

Inventory Transfers

The movement of goods from one location to another, which can involve changes in ownership within the same company or between different entities.

Effective Income Tax Rate

The average rate at which an individual or corporation is taxed, calculated by dividing total tax expense by taxable income.