The S Corporation Is Likely to Be Less Popular in the Future

question 319

Multiple Choice

The S corporation is likely to be less popular in the future because:

• A) congress repealed the limited liability protection of S corporations and limited them to companies with earnings of less than $3 million per year.
• B) limited liability companies, which do not have the restrictive eligibility requirements of S corporations and offer greater flexibility in the choice of tax treatment, are now legal in all 50 states.
• C) many states significantly increased the annual fee that S corporations must pay to maintain their tax status, thus eliminating the financial advantages of this form of ownership.
• D) S corporations have been made illegal in several states as a reaction to widespread abuse of the special benefits available to this type of business.

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Definitions:

Blindsight

A condition in which a person can respond to visual stimuli without consciously perceiving them due to damage in the visual cortex.

Dual Processing

The principle that our mind operates on two levels simultaneously: conscious and unconscious.

Cocktail Party Effect

The ability to focus one's listening attention on a single talker among a mixture of conversations and background noises.

Selective Attention

The cognitive process by which an individual focuses on one particular object or message among a range of stimuli, ignoring others.