Which of the Following Is Not a True Statement

question 106

Multiple Choice

Which of the following is not a true statement?

• A) For shareholder-employees who own 2 percent or less of the entity, the S corporation gets a tax deduction for qualifying fringe benefits, and the benefits are nontaxable to the employees.
• B) For shareholder-employees who own more than 2 percent of the S corporation, the S corporation gets a tax deduction, but the otherwise qualifying fringe benefits are taxable to the more-than-2-percent shareholder-employees.
• C) S corporation owners have a tax incentive to pay themselves a low salary.
• D) An S corporation shareholder's allocable share of ordinary business income (loss) is not classified as self-employment income for tax purposes.
• E) None of these statements is false.

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Definitions:

Calories

Units of energy that measure the amount of energy food provides to the body when consumed.

Fat

A nutrient consisting of triglycerides that is one of the primary sources of energy for the body and is also vital for insulating the body and protecting organs.

Convulsions

Sudden, involuntary muscle contractions and relaxations, often symptomatic of a neurological condition.

Deficiency

A lack or shortage, particularly of nutrients or essential substances in the body, leading to health issues.