Which of the following statements regarding S corporations is true?
A) An S corporation may have no more than 50 shareholders.
B) Any individual, estate, corporation, or trust may be an S corporation shareholder.
C) An S corporation may have only one class of stock.
D) An S corporation shareholder's allocable share of ordinary income is subject to self-employment tax.

Question

Quizplus · Accepted Answer

An S corporation is limited to having only one class of stock, although it can have both voting and non-voting shares. This is a requirement to maintain S corporation status under the Internal Revenue Code.

Which of the Following Statements Regarding S Corporations Is True