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Unformatted text preview: corporation's income only affects the (type)
character of flow through to stockholders.
Choice "b" is incorrect. A far out distractor. The elections that affect the nature and timing of an S
corporation income are made at the corporate level, not the shareholder level. The "at risk" provisions
afford no elections.
Choice "c" is incorrect. A far out distractor. The S corporation's ratio of debt to equity is only an
indication of whether or not the corporation has been properly capitalized. CPA-02259 Type1 M/C 128. CPA-02259 A-D Nov 89 II #51 Corr Ans: D PM#34 R 3-99 Page 22 An S corporation may deduct:
d. Charitable contributions within the percentage of income limitation applicable to corporations.
Net operating loss carryovers.
Foreign income taxes.
Compensation of officers. CPA-02259
Choice "d" is correct. An S corporation may deduct compensation of officers which is an ordinary and
necessary business deduction as long as it is reasonable in...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.
- Fall '10
- The Land