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Unformatted text preview: 21-2What are the eligibility requirements that a corporation must meet in order to qualify under Subchapter S?To qualify as an S Corp., the corporation must be considered a small business corporation. The business must, Under IRS regulations:Be a domestic corporationHave no more than 100 shareholdersMust include only eligible shareholders in the electionThe entity must have one class of stockThe business must not be an ineligible corporation21-13What limits are placed on the selection of a tax year of an S corporation? How do these limits differ from those applicable to C corporations and partnerships?An S Corp. must use a calendar year as their taxable year, unless certain circumstances are approved for the S Corp. by the IRS, which may allow the S Corp. to use a tax year other than the calendar year. Using a calendar year can be a challenge for businesses that changed entity type to an S Corp, and are used to using a fiscal year. changed entity type to an S Corp, and are used to using a fiscal year....
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This note was uploaded on 04/08/2012 for the course ACCOUNTING AC 505 taught by Professor Russ during the Spring '11 term at Keller Graduate School of Management.
- Spring '11