Chapter 11 Quiz

False

1) Corporations and partnerships can be S corporation shareholders.

false

A) A majority of shareholders must consent to the S corporation election.

True

A) A partnership can elect to be taxed as a corporation under the check-the-box regulations. As a corporation, an S election can be made.

True

A) An S corporation can have more than 100 shareholders since families are treated as a single shareholder.

are separately stated

A) dividend income C) short-term capital gain D) charitable contribution

False

All shareholders must consent to the revocation of S status

False

B) A nonresident alien can be an S corporation shareholder.

true

B) Convertible debt issues might be considered "stock" for purposes of the S corporation single class of stock requirement.

True

B) For C corporations that desire to be taxed like a partnership, the S corporation rules provide a practical alternative for an existing C corporation to obtain many of the tax benefits of being taxed as a partnership.

not separately stated

B) Section 1245 income

false

C) A partnership can be an S corporation shareholder

true

C) The S corporation rules were enacted to allow small corporations to enjoy the nontax advantages of the corporate form of business without being subject to the tax disadvantage of double taxation.

false

C) The S election must be made no later than the fifteenth day of the fourth month of the tax year for which the election is to be effective.

True

If an S corporation inadvertently terminates its election, the IRS may permit the corporation to report as an S corporation even for the period that includes the termination date.

True

S corp shareholders must be individuals, estates, certain tax-exempt organizations, or certain kinds of trusts.

true

Shareholders owning more than one-half the corporations' stock (including nonvoting stock) on the day the corporation makes the revocation must consent to the revocation.