Which of the Following Is Not a Requirement for Qualification

question 63

Multiple Choice

Which of the following is not a requirement for qualification as an S corporation?

• A)The corporation must be a domestic corporation.
• B)The corporation must have 25 or fewer shareholders.
• C)The corporation must have only one class of stock outstanding.
• D)The shareholders of the corporation must not be nonresident aliens.
• E)None of these.

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Definitions:

Equity Investment

An investment in stock or shares representing ownership interest in a company.

Equity Method

An accounting technique used to record investments in other companies, recognizing income in proportion to the investor's share of the company's earnings.

Outstanding Stock

Shares that have been issued by a company and are held by investors, including both public shareholders and company insiders.

Net Income

The total profit of a company after all expenses, including taxes and costs, have been subtracted from total revenues.