Which of the Following Characteristics Can Disqualify a Corporation from S

question 263

Multiple Choice

Which of the following characteristics can disqualify a corporation from S corporation status?

• A) One of the corporation's shareholders is an estate.
• B) A corporation has voting and nonvoting stock, but both types of stock confer identical rights to distribution and liquidation proceeds.
• C) A corporation has nonresident aliens as shareholders.
• D) A corporation has 101 shareholders including a husband and wife.

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Definitions:

Parent

A company that holds a controlling interest in one or more subsidiaries, or an individual who has a child.

Subsidiary

A company that is controlled by another company, known as the parent company, through majority share ownership.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio to minimize the impact of any single asset's performance.

Variability

The degree to which data points in a data set differ from each other and from the mean, indicating the volatility or dispersion around the average value.