Which statement is true regarding S corporations?
A) They are considered partnerships yet taxed like corporations as long as they follow regulations.
B) They cannot have more than 80 shareholders.
C) Shareholders do not report profit on their personal income tax forms.
D) They may be formed under state law.
E) Income is taxed only when distributed to the shareholders, who must not report the income on their personal income tax forms.

Question

Quizplus · Accepted Answer

S corporations are indeed formed under state law, similar to C corporations and other business entities. They must adhere to the specific laws and regulations of the state in which they are incorporated.

Which Statement Is True Regarding S Corporations