Which of the Following Comparisons Is Correct

question 36

Multiple Choice

Which of the following comparisons is correct?

• A)Corporations may carryback capital losses;individuals may not.
• B)Both corporation and individual long-term capital losses carryover as short-term capital losses.
• C)Corporations may carryforward capital losses indefinitely;individuals may only carryforward capital losses for five years.
• D)Both corporations and individuals may use an alternative tax rate on net capital gains.
• E)None of these.

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Definitions:

Charter of the Corporation

A legal document issued by a governmental authority that establishes a corporation and outlines its basic terms of operation, rights, and responsibilities.

Initial Directors

Initial directors are the first members of a corporation's board of directors, appointed at the time of incorporation to serve until the first shareholders' meeting.

Incorporator

The individual or entity responsible for creating and filing the necessary documentation to legally form a corporation with the state.

De Facto Corporation

A business entity that operates as if it were a corporation although it has not completed the legal formalities for incorporation, and may be treated as a corporation by courts.