Identify which of the following statements is true.
A)An S corporation cannot own any stock of another corporation.
B)An S corporation cannot own 100% of the stock of another S corporation.
C)An S corporation that owns all of the stock of a Qualified Subchapter S Subsidiary (QSub)must report all the income, deductions, and losses of the subsidiary on its own tax return.
D)All of the above are true.

Question

Quizplus · Accepted Answer

The other statements are not true. An S corporation can own stock in another corporation, but it cannot own more than 80% of the stock of another S corporation. Additionally, if the S corporation owns all the stock of a QSub, the QSub's income, deductions, and losses are not reported on the S corporation's tax return, but rather on its own separate tax return.

Identify Which of the Following Statements Is True