14. An Electing Small Business Trust is an eligible shareholder for an S corporation. *a. Trueb. False 15. Corporation X began operations on January 1, 2013, and met all of the requirements to qualify as an S corporation. On March 15, 2013, X filed a valid Form 2553 to elect S corporation status. X cannot be treated as an S corporation until 2014. 16. Billy Johnson sold his stock in Corporation Z, an S corporation, toCorporation N, a C corporation. This will not terminate Z's status as an S corporation.
17. Any incorporated business can elect to be taxed as an S corporation. 18. Since S corporations are corporations, they are subject to the accumulated earnings tax, personal holding company tax, and alternativeminimum tax. a. True*b. False 19. A corporation cannot elect S status if it has as a shareholder a corporation or partnership. 20. A corporation that wants to elect and retain S corporation status can at no time have 100 shareholders. 21. All members of the same family are treated as one shareholder in anS corporation. 22. A corporation cannot qualify as an S corporation if it has more than one class of stock. *a. Trueb. False 23. A corporation eligible to be an S corporation is automatically treated as such by the IRS. 24. A corporation's S status can only be terminated by having all shareholders revoke the S election.
25. Once filed, an S corporation cannot rescind a revocation. a. True*b. False 26. An S corporation may accidentally revoke its S status by either no longer qualifying as a small business corporation or by having accumulated E&P and excess passive investment income for three consecutive years. 27. The IRS is more likely to accept an S corporation's request to disregard an inadvertent termination if it believes that the terminating event was not reasonably within the corporation's control and was not part of a plan to terminate the corporation's S status. 28. Unlike the partnership rules, an S corporation is not allowed to specially allocate items of income, deduction, gain and loss among its shareholders. 29. The decision of whether to deduct or take a credit for foreign income taxes paid or accrued by the S corporation is made by the S corporation. a. True*b. False
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- Corporation, Taxation in the United States