Which of the Following Statements Regarding the Use of a Corporation

question 97

Multiple Choice

Which of the following statements regarding the use of a corporation as a tax shelter is false?

• A) In years in which the individual tax rates were significantly higher than the corporate rates, individuals could reduce the tax on business income by operating as a regular corporation rather than as a passthrough entity.
• B) The combination of deferral of individual tax and conversion of ordinary income into capital gain enhanced the attractiveness of corporations as tax shelters.
• C) Under the current tax rate structure, the opportunity for individuals to exploit differences between the individual and corporate rate structures is significant.
• D) Under the current tax rate structure, corporations are effective tax shelters only if business income is very small and the owners are willing to forgo dividends for a long period of time.

---

Definitions:

Recapped

The act of covering a needle with a cap or putting a cap back on a container to prevent contamination or exposure.

Injectable Medication

Drugs that are administered through a needle or syringe directly into the body tissue, bloodstream, or muscles.

Round Dose

The process of adjusting a medication's dosage to a more convenient or standardized figure for administration.

Parenteral Routes

Methods of administering drugs by means other than through the digestive system, such as intravenous, intramuscular, or subcutaneous injection.