The corporation dividend received deduction effectively reduces the tax rate applicable to "qualifying" dividends received by corporations.

Select one:

A. True

B. False

Question 2

Each separate corporation must file its own tax return.

Select one:

A. True

B. False

Question 3

By multilying the number of corporations owned by one individual, the amount taxed at rates below 34% can be increased.

Select one:

A. True

B. False

Question 4

Making the S corporation election effective at the formation of the corporation eliminates the possibility of double taxation ( assuming the election is maintained) .

Select one:

A. True

B. False

Question 5

A corporation will never pay tax when an S electionis in place.

Select one:

A. True

B. False

Question 6

Since the S election causes the corporation to be treated like a partnership, the shareholder will have potential unlimited liability for the liabilities of the S corporation.

Select one:

A. True

B. False

Question 7

Partnerships file a tax return (form 1065) and can have a federal income tax liability reported on that form.

Select one:

A. True

B. False

Question 8

The alternative minimum tax applicable to corporation is designed to accelerate the tax liability but not permanently increase the tax liability of the corporation.

Select one:

A. True

B. False

Question 9

Individuals can be subject to a permanent increase in their tax liability based on the individual alternative minimum tax.

Select one:

A. True

B. False

Question 10

The design of the passive activity loss rules is to defer deduction of passive activity losses not to deny them.

Select one:

A. True

B. False