A new start-up corporation is formed by three individuals.They expect the corporation will experience losses in its first few years.The shareholders will prefer to have the corporation taxed as a C corporation rather than making an S election.

Question

Quizplus · Accepted Answer

Shareholders typically prefer an S corporation election to pass losses through to their personal tax returns, offsetting other income, rather than being taxed at the corporate level as a C corporation.

A New Start-Up Corporation Is Formed by Three Individuals