Which of the Following Statements Regarding Constructive Dividends Is Not

question 41

Multiple Choice

Which of the following statements regarding constructive dividends is not correct?

• A) Constructive dividends do not need to be formally declared or designated as a dividend.
• B) Constructive dividends need not be paid pro rata to the shareholders.
• C) Corporations that receive constructive dividends may not use the dividends received deduction.
• D) Constructive dividends are taxable as dividends only to the extent of earnings and profits.
• E) All of the above.

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Definitions:

Control Voltage

The voltage used in a control circuit which commands the operation of electrical devices.

Digital Input

An input signal to a device or system that takes the form of binary (0 or 1) data, used in electronic devices for configuring or controlling operations.

Selector Switch

A control switch that allows the user to select between multiple settings or circuits.

Digital Input

An input signal or data that can take on only specific discrete values, commonly used in digital electronics.