Identify Which of the Following Statements Is True

question 60

Multiple Choice

Identify which of the following statements is true.

• A)A deficiency dividend is included in the shareholder's gross income for his/her tax year that includes the last day of the tax year in which the personal holding company claims a dividends-paid deduction.
• B)A shareholder who receives a deficiency dividend must report the dividend as gross income for the tax year that includes the last day of the distributing corporation's tax year on which it was a PHC.
• C)A personal holding company's payment of a deficiency dividend eliminates its need to pay the personal holding company tax as well as any interest and underpayment penalties on the tax deficiency.
• D)All of the above are false.

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Definitions:

Developing Country

A nation with a lower level of industrialization, lower living standards, and a lower Human Development Index than developed nations.

Nonprofit Agency

An organization that operates for the purpose of benefiting the public or a specific group of individuals, without the goal of making profits for owners or stakeholders.

Red Cross

An international humanitarian organization that provides emergency assistance, disaster relief, and education in areas affected by conflict or natural disasters.

Presidential Elections

A democratic process in which citizens of a country vote to elect the President, the head of the executive branch of government.