An Owner Should Choose an S-Corporation Form of Ownership When

question 83

Multiple Choice

An owner should choose an S-corporation form of ownership when he/she:

• A)has an established company that is suffering losses due to double taxation.
• B)is starting up a company and anticipating either net losses or high profits with large dividends.
• C)owns a company in which net profits before any compensation to shareholders are less than $100,000 per year.
• D)has an existing sole proprietorship and wants to lower the tax bill through deducting fringe benefits as business expenses.

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Definitions:

Natural Selection

The process by which biological traits become either more or less common in a population due to the effect on the survival and reproduction of organisms.

Evolutionary Process

The natural development and adaptation of organisms over time through mechanisms like natural selection and genetic drift.

Common Ancestors

Refers to an ancestor that two or more descendants or species have in common from their family tree or evolutionary path.

Harmonious Ecosystem

An ecological state wherein different species and elements of an environment interact in a balanced and beneficial manner, supporting sustainability.