Identify a Disadvantage of Being an S Corporation

question 4

Multiple Choice

Identify a disadvantage of being an S corporation.

• A)Generally, trusts cannot be shareholders.
• B)Losses flow through to the shareholders.
• C)The AMT on corporations is avoided.
• D)Tax-exempt income flows through to the shareholders.
• E)None of the above is a disadvantage of the S election.

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Definitions:

Positive Symptoms

Symptoms of mental disorders that include excess or distortion of normal functions, such as hallucinations or delusions.

Negative Symptoms

In psychology, especially in the context of schizophrenia, these refer to the absence of normal behaviors or feelings, such as social withdrawal or lack of emotion.

Schizophrenia

A long-term mental disorder involving a breakdown in the relation between thought, emotion, and behavior, leading to faulty perception, inappropriate actions and feelings, withdrawal from reality and personal relationships into fantasy and delusion, and a sense of mental fragmentation.

Flat Affect

A significant reduction in emotional expressiveness, where a person appears emotionally numb or unresponsive.