Which of the Following Statements Regarding Voluntary Revocation of the S

question 72

Multiple Choice

Which of the following statements regarding voluntary revocation of the S election is incorrect?

• A)In order for the revocation to be effective retroactively to the first day of the tax year,the revocation must be filed by March 15 of the affected year.
• B)All of the shareholders must consent to the revocation.
• C)The corporation cannot reelect S corporation status for five years.
• D)The revocation can provide a specified effective date to occur mid-year,requiring two tax returns to be filed for the year.

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Definitions:

Lump-Sum Tax

A tax that is a set amount, no matter the taxpayer's income level or economic activity.

Proportional Tax

A taxation framework where the same rate is consistently applied to everyone, with no variation based on the amount of income.

Marginal Tax Rate

The rate at which tax is charged on an additional dollar of income.

Average Tax Rate

The ratio of the total taxes paid to the total taxable income, showing the portion of income that goes to taxes.