Which of the following statements accurately reflects the concept of "grinding down" the small business deduction by passive income and shareholder equity?

a.

Shareholder equity has no impact on the small business deduction; it is solely determined by the company's annual revenue.

b.

Passive income earned by the corporation can decrease the amount of the small business deduction available.

c.

The grinding down provision applies only to corporations that have a significant amount of debt.

d.

The grinding down mechanism reduces the small business deduction based on the total number of shareholders in the company.