An S Election Made Before Becoming a Corporation Is Valid

question 91

True/False

An S election made before becoming a corporation is valid only beginning with the first 22-month tax year.

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Definitions:

Autonomous Consumption

The minimum level of spending that must occur, even if a household has no income.

Disposable Income

The sum households have for expenditures and savings after taxes on income are deducted.

Dissaving

The process where spending exceeds income, leading to a depletion of savings or accumulation of debt.

APC

The Average Propensity to Consume, which measures the fraction of income that households spend on goods and services rather than saving.