Identify which of the following statements is true.
A)Loans made to shareholders in proportion to their stock ownership in the corporation is evidence that the loans are disguised dividends.
B)Corporate payments for the shareholder's benefit may be a taxable dividend.
C)If the shareholder can elect to receive distributing corporation stock or money, the receipt of distributing corporation stock will be a taxable dividend.
D)All of the above are true.

Question

Quizplus · Accepted Answer

All the statements are true. A) Loans made to shareholders in proportion to their stock ownership can be seen as disguised dividends because they may not be expected to be repaid and are distributed based on ownership interest, similar to dividends. B) Corporate payments for the benefit of a shareholder can be considered a taxable dividend if they are distributions of earnings and profits. C) If a shareholder has the option to receive either corporation stock or money and chooses stock, it is still considered a taxable dividend, as it represents a distribution of the corporation's earnings and profits.

Identify Which of the Following Statements Is True