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.

---

Definitions:

Pangs of Grief

Intense emotional suffering or distress experienced as a result of loss, especially of a loved one.

Bereavement

The state of sorrow over the death or departure of a loved one, characterized by a range of emotional responses.

Posttraumatic Stress Disorder

A mental health condition triggered by experiencing or witnessing a terrifying event, characterized by flashbacks, nightmares, and severe anxiety.

Mental Health

A state of well-being in which an individual realizes their own abilities, can cope with the normal stresses of life, can work productively, and can make a contribution to their community.