Which of the Following Statements Is Not True of S

Which of the following statements is not true of S corporations?

A) S corporations are corporations that receive tax treatment similar to that given partnerships.
B) Section 1231 gains and losses pass through separately to stockholders of an S corporation.
C) The amount of S corporation losses that a shareholder of an S corporation may report on his or her tax return is limited to the basis of the stock plus any loans made by the shareholder to the corporation.
D) If a taxpayer purchases stock in an S corporation from another shareholder during the year, the new shareholder may report the entire amount of any loss for the year attributable to the shares purchased.
E) If a shareholder acquires 40 percent of the stock of an S corporation, the new shareholder cannot cause the corporation to lose its S corporation election.