R3 - Small Business Corporations - (S Corporations)

Question 1

In an S Corporation, may there be preferred and common classes of stock?

Answer 1

No, common stock only is allowed

Question 2

How long does an S corporation have to wait to sell assets so there is no tax on built-in gains?

Answer 2

10 years

Question 3

When an S corporation election is made, how long must it stay that way?

Answer 3

At least 5 years

Question 4

How many years does an S corporation have to have 25% or more of passive income to terminate the election?

Answer 4

3 years

Question 5

For type of entity is the owner’s basis increased by the owner’s share of profits and decreased by the owner’s share of losses but is not affected by the entity’s bank loan increases or decreases?

Answer 5

An S Corporation

Question 6

T/F: An S election made by the 15th day of the third month of the taxable year is retroactively effective on the first day of the taxable year

Answer 6

True