Identify Which of the Following Statements Is True

question 4

Multiple Choice

Identify which of the following statements is true.

• A)A corporation accumulates earnings to fund the redemption of a shareholder's stock following her death so as to provide her estate with liquidity to pay death taxes. Such an accumulation of earnings is a reasonable business need.
• B)A corporation accumulates earnings to fund a buy-sell agreement. Such an accumulation of earnings is a reasonable business need.
• C)A corporation's net capital gain (minus any federal income taxes paid with respect to such gain)increases the tax base for the accumulated earnings tax.
• D)All of the above are false.

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Definitions:

Physical Stamina

The ability of the body to sustain prolonged physical activity without becoming overly tired.

Tai Chi

A traditional Chinese martial art practiced for both its defense training and its health benefits, often featuring slow, precise movements to enhance physical and mental well-being.

Briskly Walk

A form of aerobic exercise that involves walking at a fast pace, typically used to improve cardiovascular health.

Eye Doctor

A medical professional specializing in the diagnosis and treatment of eye conditions and diseases; can refer to an optometrist or ophthalmologist.