1. S corporation shareholders are subject to self-employment tax on business income allocations from the S corporation if they are actively involved in the S corporations business.

   True

   False

2. Unincorporated entities are typically treated as flow-through entities for tax purposes.

   True

   False

3. Shareholders of C corporations receiving property distributions must recognize dividend income equal to the fair market value of the distributed property if the distributing corporation has sufficient earnings and profits.

   True

   False