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.

---

Definitions:

Tender Offer

A public offer made by an individual, company, or group to purchase a large percentage of another company's shares or bonds at a specified price.

Class of Shares

Different categories of stock in a corporation, each conferring distinct rights and privileges.

Due Diligence Defense

A legal defense where a defendant shows that they have taken all necessary steps to avoid violating the law, usually in relation to investments or financial transactions.

Material Omissions

Failure to disclose important information that results in presenting a misleading picture of the facts.