acct421wa6 - 29. a. Authorizing a second class of stock...

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29. a. Authorizing a second class of stock does not lose the election. b. Issuing the preferred stock causes the S election to be lost. c. Residence is not an issue, but the shareholder must still be a U.S. citizen,. d. An S corporation can be a shareholder in another corporation. e. An estate can be a shareholder. The number-of-shareholders limitation allows members of the same family to increase the number of shares. Election is not lost. f. How the limited liability company is treated does not matter. The S election is lost since they cannot be a shareholder in an S corporation. 32. If the interest of a partnership is received for payment of services, the recipient recognizes ordinary income to the extent of the fair market value of the partnership interest. The partnership is allowed the deduction for the amount of ordinary income recognized by the recipient in determining taxable income. 33.
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This note was uploaded on 10/16/2011 for the course ACCOUNTING 421 taught by Professor ?? during the Spring '10 term at Thomas Edison State.

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acct421wa6 - 29. a. Authorizing a second class of stock...

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