Which of the following statements is true of corporations? A. Income of all corp

Question

Which of the following statements is true of corporations?

A. Income of all corporations is taxed in the same way that income of partnerships is taxed.

B. Capital losses of a corporation may be deducted from ordinary income, subject to an annual limitation.

C. If a corporation has a long-term capital loss that is carried back, it is treated as a short-term capital loss.

D. A corporation's charitable contribution deduction is limited to 25 percent of the corporation's taxable income.

E. A corporation may deduct organizational expenditures as they are incurred.

Explanation / Answer

Answer: E. A corporation may deduct organizational expenditures as they are incurred.

a corporation may elect to amortize organizational expenditures as defined in section 248(b) and § 1.248-1(b). In the taxable year in which a corporation begins business, an electing corporation may deduct an amount equal to the lesser of the amount of the organizational expenditures of the corporation, or $5,000 (reduced (but not below zero) by the amount by which the organizational expenditures exceed $50,000).

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