Identify Which of the Following Statements Is False

Multiple Choice

Identify which of the following statements is false.

A) The AAA balance can be negative, but the shareholder's basis in the S corporation stock cannot be less than zero.
B) The AAA represents the cumulative income/loss recognized in post-1982 S corporation years.
C) Nonmoney property distributions made by an S corporation having accumulated E&P are treated differently when determining the corporate-level gain recognized under Sec. 311 than are property distributions made by an S corporation without accumulated E&P.
D) Tax-exempt income does not increase the AAA but increases the basis of the S corporation stock.