Which of the Following Would Not Be a Successful Means

question 63

Multiple Choice

Which of the following would not be a successful means of avoiding double tax on the earnings of a closely-held corporation?

• A) Having a shareholder lend money to the corporation at a reasonable rate of interest.
• B) Having a shareholder lease warehouse space to the corporation at a reasonable rental rate.
• C) Having the corporation pay the shareholder a fixed percentage of the par value of the stock the shareholder owns.
• D) Having the corporation employ the shareholder at a reasonable compensation.

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Definitions:

Substitute Resources

Productive inputs that can be used instead of other inputs in the production process; resources for which an increase in the price of one leads to an increase in the demand for the other.

Capital Goods

Long-lasting goods that are used in the production of other goods or services.

Bank Tellers

Individuals employed by banks to assist customers with routine transactions like withdrawing or depositing money, among other services.

ATMs Spread

The spread of ATMs refers to the increasing availability and distribution of Automated Teller Machines across different locations, making financial transactions more accessible.