Which of the following conditions will not cause an S election to be terminated?
A)exceeding the 100-shareholder limit
B)creating a second class of stock having a dividend preference
C)selecting an improper tax year
D)failing to file a timely tax return

Question

Quizplus · Accepted Answer

Failing to file a timely tax return may result in penalties, but it will not cause an S election to be terminated. However, exceeding the 100-shareholder limit, creating a second class of stock with a dividend preference, or selecting an improper tax year can all result in termination of an S election.

Which of the Following Conditions Will Not Cause an S