Which of the Following Statements Regarding Constructive Dividends Is Not

question 41

Multiple Choice

Which of the following statements regarding constructive dividends is not correct?

• A) Constructive dividends do not need to be formally declared or designated as a dividend.
• B) Constructive dividends need not be paid pro rata to the shareholders.
• C) Corporations that receive constructive dividends may not use the dividends received deduction.
• D) Constructive dividends are taxable as dividends only to the extent of earnings and profits.
• E) All of the above.

---

Definitions:

Mastery of Abilities

The process of acquiring and perfecting skills or competencies to a high level of proficiency.

Challenge

The call to competition, contest, or battle.

Intragroup Conflict

Conflict that occurs within groups or teams.

Business Strategy

A plan of action or policy designed to achieve a major or overall aim in business.