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25 January, 03:39

Identify a disadvantage of being an S corporation.

a. Estates can be shareholders.

b. Losses flow through immediately to the shareholders.

c. Section 1202 treatment (qualified small business stock) is not available.

d. Tax-exempt income flows through as excludible to shareholders.

e. All of these are advantages of the S election.

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  1. 25 January, 03:52
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    The answer is C. section 1202 treatment (qualified small business stock) is not available

    Explanation:

    An S corporation refers to a type of corporation that meets specific internal revenue code requirement.

    S corporation is often more attractive to small-business owners than a standard (or C) corporation. That's because they have some appealing tax benefits and still provides business owners with the liability protection of a corporation.

    Corporation taxes filed under S corporation may pass business income, losses, deductions, and credits to shareholders. S corporation shareholders must be individuals, specific trusts and estates, or certain tax-exempt organization.
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