Identify Which of the Following Statements Is True

question 22

Multiple Choice

Identify which of the following statements is true.

• A)Perry Corporation, an S corporation, receives $10,000 of dividends from a 25%-owned domestic corporation. Perry is allowed an 80% dividends-received deduction with respect to the distribution.
• B)An NOL is incurred by a C corporation in the current tax year. The C corporation makes an S election for the following tax year. The entire C corporation NOL carryover can be passed through to the S corporation's shareholders at the end of the following tax year.
• C)Tax-exempt interest earned by an S corporation is not reported to its shareholders because it is excluded from the shareholders' gross income.
• D)All of the above are false.

---

Definitions:

Interest

The cost of borrowing money or the return on investment, typically expressed as a percentage of the principal amount.

Power Distance

A cultural dimension that describes the extent to which individuals in a society accept and expect power to be distributed unequally.

Full-time Work

Employment in which individuals work a minimum number of hours defined by their employer as full-time, typically around 40 hours per week.

Monotheism

The belief in the existence of only one god that created the world, omnipotent and omniscient.