Which of the following is not a characteristic of an S corporation?
A)Must be formed under state law
B)The transfer of property for stock is always tax-free
C)A shareholder's share of ordinary income increases his or her stock basis
D)The shareholder never recognizes loss on a nonliquidating distribution

Question

Quizplus · Accepted Answer

The transfer of property for stock is not always tax-free in an S corporation; it depends on specific conditions being met under the Internal Revenue Code.

Which of the Following Is Not a Characteristic of an S