An S-corporation allows the stockholders to avoid double taxation but places limits on the ownership of the firm's stock.

Question

Quizplus · Accepted Answer

S-corporations are designed to avoid double taxation by not taxing the corporation itself, but instead passing profits and losses through to the stockholders to be reported on their individual tax returns. However, restrictions on the type and number of stockholders (including limits on ownership by non-U.S. citizens and certain types of entities) apply in order to maintain the corporation's S-status.

An S-Corporation Allows the Stockholders to Avoid Double Taxation but Places