Personal Service Corporations (PSCs)have Certain Special Characteristics

question 89

Multiple Choice

Personal Service Corporations (PSCs) have certain special characteristics.Which of the following describes a PSC?
I.A PSC is not permitted to reduce any of its income from portfolio investments with a passive activity loss.
II.The owner-employees aggregately own more than 95% of the corporate stock.
III.The performance of personal services by owner-employees is the principal activity.
IV.PSCs are subject to a flat income tax of 35% of taxable income.
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• A)Only statement I is correct
• B)Only statement III is correct.
• C)Only statements III and IV are correct.
• D)Only statements II,III,and IV are correct.
• E)Statements I,II,III,and IV are correct.

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Definitions:

Central Nervous System

Comprises the brain and spinal cord; the primary information processing center for coordinating bodily functions and responses.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brain, down the back, and transmits nerve signals between the brain and the body.

Brain

A complex organ of the central nervous system, responsible for processing sensory information, regulating bodily functions, and enabling cognitive abilities such as thought and emotion.

Neuron

A specialized cell of the nervous system responsible for transmitting information throughout the body in the form of electrical and chemical signals.