Which of the Following Statements Regarding the Tax Treatment of Start-Up

question 79

Multiple Choice

Which of the following statements regarding the tax treatment of start-up losses is false?

• A) Start-up losses of a business organized as a C corporation create NOL carryforwards, deductible in future years when the business generates a profit.
• B) Start-up losses of a business organized as a partnership are deductible by the partners, potentially generating immediate tax savings.
• C) Start-up losses of a business organized as an S corporation create NOL carryforwards, deductible in future years when the business generates a profit.
• D) Start-up losses of a business organized as an S corporation are deductible by the shareholders, potentially generating immediate tax savings.

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Definitions:

Herfindahl Index

A calculation of how concentrated a market is, achieved by adding together the market share squares of every firm within that industry.

Market Power

The ability of a company or group of companies to manipulate prices or market conditions in their favor, often due to a lack of significant competition.

Oligopoly

A market structure dominated by a small number of large firms, leading to limited competition and potentially higher prices.

Monopoly

A market configuration where there is only one seller offering a distinctive product in the marketplace.