FFA EA Book Reference: CH 13 CorporationsSubsection: S corporationsSubject: Tax law related to S corporation3. Explanation: S corporation shareholders must be individuals, estates, exempt organizations, or certain trusts. (not partnerships or corporations).Correct Answer: AFFA EA Book Reference: CH 13 CorporationsSubsection: S corporationsSubject: Tax law related to S corporation
occur in those years. Corporations that carry a net capital loss to another tax year, treat it as a short-term loss. It does not retain its original identity as long term or short term.Smith Corporation has a net capital loss of $2,000 (15,000 short-term gain + 10,000 long-term gain - 27,000 long-term loss). Smith Corporation treats the net capital loss as short-term for carry back and carry forward purposes.