When a Business Is Operated as an S Corporation, a Disadvantage

question 39

True/False

When a business is operated as an S corporation, a disadvantage is that the shareholder must pay the tax on his or her share of the S corporation's income even though the S corporation did not distribute the income to the shareholder.

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Definitions:

R&D

Research and Development (R&D) denotes the activities related to the innovation and improvement of products and processes.

Resistance to Change

The reluctance or refusal to accept new policies, practices, or conditions, often seen in organizational contexts when transformations are initiated.

Ignorance

The lack of knowledge, information, or awareness about something.

Self-Interest

The consideration of one's own advantage or well-being above those of others or the common good.