Davies Corporation Is a Calendar-Year Taxpayer That Is Owned Equally

question 15

Multiple Choice

Davies Corporation is a calendar-year taxpayer that is owned equally by Vivian, Rob, Danny, and Doug Davies. At the close of business on May 31, Rob Davies sells his 25% stock interest to Paula Bryan. Which of the following statements about the S election is correct?

• A)Paula must consent to the S election, otherwise the election terminates at the close of business on May 31.
• B)A new S election form must be filed by June 30 of the same year, with all shareholders consenting to the election. If a new S election is not filed, the election terminates on June 30 of that year.
• C)Paula has 30 days to terminate the S election, otherwise the election remains in place for the entire year and all subsequent years.
• D)None of the above statements are correct.

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Definitions:

Positive Symptoms

Features added to a person's behavior due to certain conditions, like hallucinations or delusions in psychiatric disorders such as schizophrenia.

Negative Symptoms

In the context of psychiatric disorders, particularly schizophrenia, symptoms characterized by deficits or decreases in normal emotional and behavioral functions, such as lack of emotion or motivation.

Schizophrenia

A chronic and severe mental disorder that affects how a person thinks, feels, and behaves, often involving delusions, hallucinations, and disordered thinking.

Catatonia

A neuropsychiatric behavioral syndrome characterized by abnormal movements and behaviors, often including mutism, rigidity, and stupor.