Identify a Disadvantage of S Corporation Status

question 30

Multiple Choice

Identify a disadvantage of S corporation status.

• A) Most trusts can be shareholders.
• B) Losses flow through to the shareholders.
• C) The ACE adjustment is avoided.
• D) Tax-exempt income flows through to the shareholders.
• E) None of the above is a disadvantage of the S election.

---

Definitions:

Affective Responses

Emotional reactions or feelings that are elicited by stimuli, events, or interactions, influencing behavior and decision-making.

Creativity

Creativity involves the ability to generate new ideas, solutions, or approaches, often leading to innovative outcomes.

Negative Affect

A psychological term for negative emotions and mood states, including sadness, anger, and anxiety.

Positive Affect

The experience of positive emotions and sentiments, contributing to overall well-being and happiness.