Which of the following is not eligible to be a shareholder of an S corporation?

Which of the following is not eligible to be a shareholder of an S corporation?

A. A domestic partnership.

B. Individuals who are not nonresident aliens.

C.Estates.

D.Exempt organizations described in Sec. 401(a) or 501(c)(3).


Answer: A. A domestic partnership

Which of the following characteristics can disqualify a corporation from S corporation status?

Which of the following characteristics can disqualify a corporation from S corporation status?

A. Corporation Z has as one of its shareholders a trust that is treated as entirely owned by an individual who is a U.S. citizen.

B. Corporation M has 101 shareholders, including a husband and wife.

C. Corporation B has voting and nonvoting stock.

D. Corporation T has as its shareholders an individual, an estate, and a partnership.


Answer: D. Corporation T has as its shareholders an individual, an estate, and a partnership.

All of the following entities would qualify as shareholders of an S corporation except

All of the following entities would qualify as shareholders of an S corporation except

A. A resident of the United States.

B. An estate of an individual in bankruptcy.

C. A trust owned by an individual who is a United States citizen.

D. A partnership.


Answer: D. A partnership.

Which one of the following is not a requirement to make an S corporation election?

Which one of the following is not a requirement to make an S corporation election?

A. The corporation must have no trusts as shareholders.

B. Shareholder consent must be unanimous.

C. Only one class of stock can be outstanding.

D. The entity must be a domestic entity that elects corporation treatment under the check-the-box regulations.


Answer: A. The corporation must have no trusts as shareholders.

All of the following entities are allowed to elect S status except

All of the following entities are allowed to elect S status except

A. Domestic international sales corporation (DISC).

B. Domestic building and loan association.

C. Mutual savings bank.

D. A cooperative bank without capital stock organized and operated for mutual purposes and without profit.


Answer: A. Domestic international sales corporation (DISC).

Which of the following entities is ineligible to be an S corporation shareholder?

Which of the following entities is ineligible to be an S corporation shareholder?

A. Charitable remainder annuity trust.

B. Employee stock option plan (ESOP).

C. Electing small business trust.

D. Qualified retirement plan trust.


Answer: A. Charitable remainder annuity trust.