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ch22 Student: ___________________________________________________________________________ 1. S corporations offer the same legal protection to owners as C corporations. True False 2. The S corporation rules are less complex for S corporations that have earnings and profits from prior C corporation years than for S corporations that do not have earnings and profits from prior C corporation years. True False 3. The same exact requirements for forming and contributing property govern S corporations and partnerships. True False 4. S corporations may have no more than 50 shareholders, but members of the same family only count as one shareholder. True False 5. Differences in voting powers are permissible across shares of S corporation stock as long as the shares have identical distribution and liquidation rights. True False 6. Publicly traded corporations cannot be treated as S corporations. True False 7. To make an S election effective as of the beginning of the current year, an S corporation must file Form 2553 within 3 months after the beginning of the year. True False 8. Bobby T (95% owner) would like to elect S corporation status for DJ, Inc. Dallas (5% owner) does not want to elect S corporation status. Bobby T cannot elect S status for DJ, Inc. without Dallas' consent. True False 9. An S corporation may be voluntarily or involuntarily terminated. True False 10. An S corporation can make a voluntary revocation of an S election if shareholders holding more than 25 percent of the S corporation stock (including nonvoting shares) agree. True False 11. Bobby T (75% owner) would like to terminate the S corporation status for DJ, Inc. Dallas (5% owner) does not want to terminate the S corporation status. Bobby T can terminate the S status for DJ, Inc. without Dallas' consent. True False 12. An S election is terminated if the S corporation has passive investment income in excess of 20 percent of gross receipts for three consecutive years. True False 13. If an S corporation never operated as a C corporation, it may earn passive investment income without fear of an involuntary S election termination. True False 14. If an S corporation shareholder sells her stock to a nonresident alien, it will automatically terminate the S election. True False 15. The specific identification method is a method an S corporation may use to allocate its income across short tax years that result from an involuntary S election termination. True False 16. The specific identification method and monthly allocation method are methods an S corporation may use to allocate its income across short tax years that result from an involuntary S election termination. ... View Full Document

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