S Corporation Shareholders Who Own More Than 2% of the Outstanding

question 136

Multiple Choice

S corporation shareholders who own more than 2% of the outstanding stock are eligible for which of the following tax-free benefits?

• A)group term life insurance exclusion under Sec.79 for premiums paid for up to $50,000 coverage
• B)exclusion for meals and lodging furnished for the convenience of the employer
• C)exclusion from income for premiums paid for accident and health and medical reimbursement plans
• D)None of the above.

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Definitions:

Copayment

The percentage of (say, health care) costs that an insured individual pays while the insurer pays the remainder.

Monopsony Power

A market situation in which there is only one buyer for a product or service, giving that buyer substantial control over market conditions.

Deferred Benefit Plan

A type of retirement plan in which employees receive benefits, such as pension income, at a later date following years of service, rather than receiving these benefits during their active employment.

Demand And Supply Diagram

A graphical representation that displays the relationship between the price of a good and the quantity of the good that suppliers are willing and able to supply and demanders are willing and able to purchase.