Which of the following events could cause an S corporation to cease to qualify as an S corporation?
A. The S corporation transfers its stock to a corporation or partnership.
B. A shareholder has zero basis in his stock.
C. A 25% shareholder sells his shares to an individual who wants to revoke the corporation's S status.
D. The corporation is liable for tax on excess net passive investment income for 2 consecutive years.
Answer: A. The S corporation transfers its stock to a corporation or partnership.