Which of the Following Statements Regarding S Corporations Is True

question 58

Multiple Choice

Which of the following statements regarding S corporations is true?

• A) If an S corporation's election terminates, the corporation is forced to liquidate.
• B) All states treat the S corporation as a taxable corporation for corporate franchise tax purposes.
• C) Generally, the transfer of property by a controlling shareholder to a newly-formed S corporation in exchange for stock is a nontaxable event.
• D) The owners of a new business should be indifferent between operating as an S corporation and a partnership.

---

Definitions:

Particular Proposition

A categorical proposition that makes an assertion about at least one but not all members of the class designated by its subject term (I and O).

Venn Diagram

A visual representation of the mathematical or logical relationships between different groups, often depicted with circles that overlap.

Existential Import

An attribute of propositions that implies the existence of the subject matter within logical or philosophical analysis.

Venn Diagram

A diagram using overlapping circles to visually represent relationships between different sets of items.