Factors That Should Be Considered in Making the S Corporation

question 162

Multiple Choice

Factors that should be considered in making the S corporation election for the current tax year include the following:

• A) Are greater than 50% of the shareholders willing to consent to the election?
• B) Can the requirements for qualification be satisfied by the 15th day of the third month of the tax year and also for the period of the tax year that precedes this date?
• C) Will the corporation have total capital not in excess of $1 million?
• D) Only b. and c.
• E) a., b., and c.

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Definitions:

Business Combinations

Transactions or events in which an acquirer obtains control over one or more businesses.

Acquisition

The process by which one company takes control over another company, either through direct purchase, merger, or management control.

Stockholders' Equity

The ownership interest represented by the value of a corporation's assets minus its liabilities.

Initial Value Method

An accounting practice where an investment is recorded at its original purchase cost.