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.

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Definitions:

Intracellular Enzymes

Enzymes that operate within cells, facilitating biochemical reactions necessary for cellular metabolism and processes.

Vitamin D

Fat-soluble vitamin produced from precursor molecules in skin exposed to ultraviolet light; increases calcium and phosphate uptake from the intestines.

Osmoreceptor Cells

Cells that detect changes in the osmotic pressure of the body fluids, contributing to the regulation of the body's water balance.

Plasma Volume

The volume of the plasma component of blood, which is the liquid part of the blood that holds the blood cells in whole blood in suspension.