Which of the following statements is correct regarding S corporation estimated taxes?
A) S corporations never pay estimated taxes.
B) S corporations with a federal income tax liability of $500 due to the built-in gains tax or excess net passive income tax must pay estimated taxes.
C) S corporations that owe $5,000 in LIFO recapture tax only must pay estimated taxes.
D)S corporations with a federal income tax liability of $100 due to the excess net passive income tax must pay estimated taxes.
E)None of these

Question

Quizplus · Accepted Answer

S corporations with a federal income tax liability of $500 due to the built-in gains tax or excess net passive income tax must pay estimated taxes. Option C is incorrect because LIFO recapture taxes are due only when a company transitions from LIFO to another inventory valuation method, and the tax liability cannot be solely attributable to S corporation status. Option D is incorrect because the threshold for owing estimated taxes due to excess net passive income tax is $1,000, not $100. Option A is incorrect because S corporations are required to pay estimated taxes under certain circumstances.

Which of the Following Statements Is Correct Regarding S Corporation