AIRE Was Initially Formed as an S Corporation Three Years

question 123

Essay

AIRE was initially formed as an S corporation three years ago. AIRE has four equal shareholders, Adam, Irene, Raymond, and Ethan. Raymond and Ethan would like to terminate the S election. However, Adam and Irene are opposed to the idea. Can Raymond and Ethan make a voluntary election to terminate the S election without the consent of Adam and/or Irene? Explain.

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Definitions:

Lower Price

A strategy or situation where the cost of goods, services, or commodities is reduced to make them more attractive to buyers.

Maquiladoras

Factories located in Mexico, typically near the US border, that import materials and equipment on a duty-free and tariff-free basis for assembly or manufacturing and then export the assembled product.

Foreign Trade Zones

Designated areas where goods can be imported, stored, handled, manufactured, or reconfigured without being subject to customs duty.

Labor Costs

The total expenditures related to compensating employees, including wages, benefits, and taxes.