Identify Which of the Following Statements Is True

question 4

Multiple Choice

Identify which of the following statements is true.

• A)A corporation accumulates earnings to fund the redemption of a shareholder's stock following her death so as to provide her estate with liquidity to pay death taxes. Such an accumulation of earnings is a reasonable business need.
• B)A corporation accumulates earnings to fund a buy-sell agreement. Such an accumulation of earnings is a reasonable business need.
• C)A corporation's net capital gain (minus any federal income taxes paid with respect to such gain)increases the tax base for the accumulated earnings tax.
• D)All of the above are false.

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Definitions:

Project Celebration

An event or gathering organized to acknowledge the successful completion of a project and to celebrate the team's efforts.

Time Elapsed

Time elapsed is the total amount of time that has passed from the start of an event or activity to a particular point or its completion.

Dealing Fairly

Dealing fairly means engaging in practices that are just, equitable, and transparent in all business and personal transactions.

Appreciation Expressed

Recognition or expression of gratitude toward someone or something, often shown for contributions or achievements.