Identify Which of the Following Statements Is True

question 60

Multiple Choice

Identify which of the following statements is true.

• A)A deficiency dividend is included in the shareholder's gross income for his/her tax year that includes the last day of the tax year in which the personal holding company claims a dividends-paid deduction.
• B)A shareholder who receives a deficiency dividend must report the dividend as gross income for the tax year that includes the last day of the distributing corporation's tax year on which it was a PHC.
• C)A personal holding company's payment of a deficiency dividend eliminates its need to pay the personal holding company tax as well as any interest and underpayment penalties on the tax deficiency.
• D)All of the above are false.

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Definitions:

Labor and Capital

The primary factors of production where labor refers to human effort and capital represents buildings, machinery, and equipment.

Fundamental Questions

The basic economic questions that every society must answer, which include what to produce, how to produce, and for whom to produce.

Prices Charged

The amount of money demanded by a business in exchange for its goods or services.

Goods and Services

Products and actions that fulfill human wants or needs, with goods being tangible items and services being intangible services.