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:

Uniform Partnership Act

A standardized set of laws enacted to regulate the operation of partnerships within the United States, aiming to harmonize the law of business partnerships across jurisdictions.

Uniform Business Act

The Uniform Business Act is a standardized set of laws designed to regulate business and commercial transactions across different jurisdictions in a consistent manner.

Uniform Commercial Code

The Uniform Commercial Code is a comprehensive set of laws governing all commercial transactions in the United States.

Joint Proprietorship

A business ownership structure where two or more individuals share the ownership, responsibilities, and liabilities of the business.