Which of the Following Statements Is Not True of S

question 23

Multiple Choice

Which of the following statements is not true of S corporations?

• A)S corporations are corporations that receive tax treatment similar to that given partnerships.
• B)Section 1231 gains and losses pass through separately to stockholders of an S corporation.
• C)The amount of S corporation losses that a shareholder of an S corporation may report on his or her tax return is limited to the basis of the stock plus any loans made by the shareholder to the corporation.
• D)If a taxpayer purchases stock in an S corporation from another shareholder during the year, the new shareholder may report the entire amount of any loss for the year attributable to the shares purchased.
• E)If an otherwise qualifying shareholder acquires 40 percent of the stock of an S corporation, the new shareholder cannot cause the corporation to lose its S corporation election.

---

Definitions:

Holistic

An approach or process that emphasizes the importance of the whole and the interdependence of its parts, typically used in contexts such as health, learning, and problem-solving.

Agonistic

Relating to a physiological response to a stimulus or to the competition between organisms for resources.

Syntax

The set of rules, principles, and processes that govern the structure of sentences in a given language, especially the order of words.

Two-Word Phrases

Pairs of words combined to create a specific meaning or concept, often used in linguistics and study of syntax.