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:

Regular Customers

Customers who repeatedly purchase goods or services from a business, showing loyalty and contributing to stable revenue.

Current Profitability

A measure of a company’s current ability to generate profit from its operations over a specific period.

Products Order

An order placed by a customer or company for specific goods or materials.

Emphasized

To give special importance or prominence to something within a particular context.