Which of the Following Is True Regarding S Corporations

question 12

Multiple Choice

Which of the following is true regarding S corporations?

• A) They are considered partnerships yet taxed like corporations as long as they follow regulations.
• B) They cannot have more than 80 shareholders.
• C) Shareholders do not report profit on their personal income tax forms.
• D) They may be formed under federal law.
• E) Income is taxed only when distributed to the shareholders, who must not report the income on their personal income tax forms.

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Definitions:

Sublimation

A defense mechanism in which socially unacceptable impulses are transformed into socially acceptable actions or behavior.

Projection

A defense mechanism where individuals attribute their own unacceptable thoughts, feelings, and motives to another person.

Displacement

In psychology, a defense mechanism where an individual shifts negative feelings from their original source to a more acceptable or less threatening target.

Denial

A defense mechanism where an individual refuses to accept reality or facts, thus avoiding dealing with painful feelings or events.