If an S Corporation Never Operated as a C Corporation

question 12

True/False

If an S corporation never operated as a C corporation, it may earn passive investment income without fear of an involuntary S election termination.

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Definitions:

Business Portfolio

The collection of businesses and products that make up a company, analyzed for strategic planning to enhance business performance.

Diversification Analysis

A technique that helps a firm search for growth opportunities from among current and new markets as well as current and new products.

Business Portfolio Analysis

A strategic evaluation that examines a company’s range of products or services to determine their individual strengths, weaknesses, and contributions to overall business goals.

Strategic Business Units

Subsidiary divisions within a larger company, each focusing on a specific business area, with its own strategy and objectives.