Which of the following statements about S corporations is most accurate?
A) The major attraction of S corporations is that they avoid the problem of double taxation.
B) S Corporations are similar to C corporations, except that the majority of owners are foreign investors.
C) Any corporation willing to pay the necessary fees and fill out the required paperwork can become an S Corporation.
D) Only large corporations with operations in more than one state can qualify to be classified as S corporations.

Question

Quizplus · Accepted Answer

S corporations are a type of corporation that avoids double taxation by passing through profits and losses to shareholders who report them on their individual tax returns. This is one of the major attractions of S corporations for small business owners. B is incorrect as there is no requirement for foreign investment in an S corporation. C is also incorrect as there are specific eligibility requirements that a corporation must meet to qualify for S corporation status. D is incorrect as there is no requirement for a corporation to have operations in more than one state to qualify as an S corporation.

Which of the Following Statements About S Corporations Is Most