Identify Which of the Following Statements Is False

question 31

Multiple Choice

Identify which of the following statements is false.

• A)Randy is a shareholder in an S corporation. His stock basis is $10,000 and his basis in a loan he made to the corporation is $3,000. Randy's share of the corporation's ordinary loss for the current year is $11,000. Ignoring the at-risk and passive activity limitations, Randy can deduct the loss in full.
• B)A shareholder's S corporation stock basis will increase when the shareholder acts as guarantor on a corporate indebtedness.
• C)A shareholder's ratable share of the S corporation's ordinary loss reduces the adjusted basis of his/her S corporation stock. Once the basis of the stock is reduced to zero, any loss-passthrough that remains reduces the basis of S corporation debts that are owed to the shareholder.
• D)Debt basis is restored before stock basis.

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Definitions:

Sewerage

The infrastructure designed for the collection, transport, and disposal of sewage.

Drinking Water

Water that is safe for human consumption, free from contaminants and pathogens.

Life Expectancy

The average period that a person may expect to live, based on the statistical analysis of age-specific death rates.

Sociologist

A scholar or practitioner in sociology, which is the study of social behavior, society, patterns of social relationships, social interaction, and culture.