Select from the pop-up boxes the best match for each item. Double-click on each
ID: 2560038 • Letter: S
Question
Select from the pop-up boxes the best match for each item. Double-click on each blank box to see a list of answer choices and click on your selection. Each choice may be used once, more than once, or not at all. Assume that Subchapter S rules, if applicable, would require the corporation to adopt the calendar year for purposes of reporting federal income taxes. Situation Answer 1. Ownership of the 1,000 shares outstanding are evenly divided among 80 shareholders. The shareholders are 78 individuals, 10 of whom are married to each other, and two estates 2. A domestic corporation elects S status on April 15. 3. Articles of incorporation authorize 800 shares of voting common stock, 200 shares of nonvoting preferred, and no other shares 4. A domestic corporation elects S status on March 3. 5. Articles of incorporation authorize 1,000 shares of common stock and no other stock. One-fifth of the common stock has no voting rightsExplanation / Answer
Situation 1=
Ownership is divided into less than 100 shareholders so permitted
Situation 2 =
Elects as a S status on 15 April which is not within 2.5 months from beginning of calender year. So, it is effectively subsequent not in the current year.
Situation 3 =
an S status can issue both voting as well as non voting stock. So, it is permitted
Situation 4 =
Elects as a status in 3 March, that is within 2.5 months of beginning of the calender year. So, it is retroactively effective for current year also.
Situation 5 =
Articles authorise one fifth of the common stock as non voting. But the provision is of less than one fifth. So, it is non permitted
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