All of the following are disadvantages of S-corporations except:
A) Investors cannot receive preferred shares.
B) Qualification requirements necessitate administrative and cost burdens.
C) Not eligible for qualified employee stock options.
D) Owners pay all taxes.

Question

Quizplus · Accepted Answer

Owners of S-corporations do not pay all the taxes themselves; instead, the corporation's income, losses, deductions, and credits flow through to shareholders, who report these items on their personal tax returns. This avoids the double taxation common in C-corporations, where both the corporation and the shareholders are taxed.

All of the Following Are Disadvantages of S-Corporations Except