Identify Which of the Following Statements Is True

Multiple Choice

Identify which of the following statements is true.

A) Beach Corporation, an S corporation, has gross receipts of $240,000; taxable income of $120,000; passive investment income of $100,000; and expenses directly attributable to the passive investment income of $20,000. The corporation's excess net passive income is $32,000.
B) The built-in gains tax applicable to S corporations can be avoided if the property is held for ten years.
C) An S corporation generally will not owe the built-in gains tax if the corporation has never been a C corporation.
D) All of the above are true.