Which of the following statements about S corporations is MOST accurate?
A) S corporations enable owners to avoid the problem of double taxation.
B) S corporations can have an unlimited number of owners.
C) S corporations must have fewer than 5 employees.
D) S corporation are easier to set up than sole proprietorships and partnerships.
E) S corporations have unlimited liability.

Question

Quizplus · Accepted Answer

S corporations enable owners to avoid double taxation as they are not taxed at the corporate level; instead, profits and losses are passed through to individual shareholders and reported on their personal tax returns.

B) S corporations are limited to 100 shareholders.
C) S corporations do not have a limit on the number of employees they can have.
D) S corporations require specific eligibility criteria and must file with the IRS to elect S corporation status, making them more complex to set up than sole proprietorships and partnerships.
E) S corporations offer limited liability protection to their shareholders.

Which of the Following Statements About S Corporations Is MOST