Identify Which of the Following Statements Is True

question 2

Multiple Choice

Identify which of the following statements is true.

• A)Fringe benefits limited by the more-than-2%-shareholder rule include stock options, group term life insurance premiums, and medical insurance premiums.
• B)A shareholder owning 2% or more of an S corporation's stock, who is also an employee of the corporation, must include all statutory fringe benefits in gross income on his/her individual return.
• C)Section 318 stock attribution rules are used to define 2% or more shareholders of S corporation's stock.
• D)All of the above are false.

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Definitions:

False Representation

An untrue statement of fact made by one party to another, which induces the latter to enter into a contract.

Consideration

An essential element in contract law, referring to something of value exchanged between parties.

Fraudulently Misrepresented

The act of deliberately providing false or misleading information with the intent to deceive in a contractual agreement.

Disaffirm

The legal right of a minor or other parties to void or cancel certain types of contracts, to protect against exploitation.