Which Statement Is Incorrect

question 103

Multiple Choice

Which statement is incorrect?

• A)S corporation status allows shareholders to realize tax benefits from corporate losses immediately.
• B)Shareholder-level tax on corporate profits can be eliminated by a step-up in the basis of the stock upon a shareholder's death.
• C)Fewer than 50% of all U.S.corporations make the S election.
• D)An S corporation resembles an LLC for Federal income tax purposes.
• E)None of the above.

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Definitions:

Marginal Cost (MC)

The rise in overall expenses linked to the production of an extra unit of a product or service.

Average Variable Cost (AVC)

The total variable cost divided by the quantity of output produced, measuring the variable cost per unit.

Average Total Costs (ATC)

The per-unit total cost (including both fixed and variable costs) of producing a good or offering a service.

Manufacturing Firm

A company involved in the conversion of raw materials into finished goods through the use of equipment and processes.