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Unformatted text preview: a. b. c. d. 1 3 5 10 CPA-02263 Explanation Choice "c" is correct. 5 years. Rule: After a corporation's status as an S corporation is revoked or terminated, the corporation is required to wait 5 years before making a new S election, in the absence of IRS consent to an earlier election. Choices "a", "b", and "d" are incorrect, per the above rule. CPA-02265 Type1 M/C 131. CPA-02265 A-D Nov 91 II #57 Corr Ans: D PM#37 R 3-99 Page 46 A corporation that has been an S corporation from its inception may: a. b. c. d. Have both passive and nonpassive income No Yes No Yes Be owned by a bankruptcy estate Yes No No Yes CPA-02265 Explanation Choice "d" is correct. Rule: 1. A corporation that has always been an S corporation may have both "passive income" and "non passive income." 2. Shareholders of an S corporation must be: individuals, estates, a voting trust, a grantor trust, and/or a bankruptcy estate. Choices "a", &q...
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