The Income Generated by S Corporations

question 266

Multiple Choice

The income generated by S corporations

• A) passes through to its owners, and each is taxed individually for this income.
• B) is provided to nonprofit organizations, so it is considered a tax-free source of funds.
• C) is taxed separately from its owners.
• D) must be reinvested in the business. Owners should not expect dividends.

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Definitions:

Aerobic Bacteria

Bacteria that require oxygen for their growth and survival.

Oxygen

A chemical element (O) that is a highly reactive nonmetal, essential for respiration in most living organisms.

Fungal Infection

An overgrowth of fungi in or on the body, typically causing irritation or disease; common types include thrush and athlete's foot.

Keratin

A type of protein found in hair, nails, and skin, providing strength and protection.