Question

S Corporations are flow-through entities in which S income is allocated to shareholders

a)True
b)False

Answer 1

S Corporations are flow-through entities in which S income is allocated to shareholders. This means that the income or losses of the corporation are passed through to the individual shareholders, who report them on their personal tax returns.

Step-by-step explanation:

True. S Corporations are flow-through entities in which S income is allocated to shareholders. As flow-through entities, S Corporations do not pay income tax at the corporate level. Instead, the income or losses of the corporation are passed through to the individual shareholders, who report them on their personal tax returns.