Identify Which of the Following Statements Is False

question 94

Multiple Choice

Identify which of the following statements is false.

• A)The AAA balance can be negative, but the shareholder's basis in the S corporation stock cannot be less than zero.
• B)The AAA represents the cumulative income/loss recognized in post-1982 S corporation years.
• C)Nonmoney property distributions made by an S corporation having accumulated E&P are treated differently when determining the corporate-level gain recognized under Sec. 311 than are property distributions made by an S corporation without accumulated E&P.
• D)Tax-exempt income does not increase the AAA but increases the basis of the S corporation stock.

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Definitions:

Little Competition

A market condition where there are few competitors, often allowing for higher prices and greater market control by existing businesses.

Occupancy Costs

The total expenses associated with maintaining and using a space, including rent, utilities, and maintenance costs.

Economic Factors

Elements that influence a country's economy and are typically considered in business and financial planning, including inflation rates, interest rates, economic growth, and unemployment levels.

Leasehold Improvements

Changes that make a property more valuable, such as painting, adding shelves, or installing new lighting.