In its first year of operations, a corporation projects losses of $400,000. Since losses are involved, the corporation definitely should elect S corporation status.

Question

Quizplus · Accepted Answer

The fact that the corporation is projecting losses does not necessarily mean that it should elect S corporation status. The decision to elect S corporation status depends on various factors, such as the number of shareholders, ownership structure, and tax considerations. It is important for the corporation to consult with a tax advisor before making such a decision.

In Its First Year of Operations, a Corporation Projects Losses