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Question 67 of 75. Each of these events will lead to automatic termination of the S...

Question 67 of 75.

Each of these events will lead to automatic termination of the S corporation election EXCEPT:

A. The corporation ceases to be a small business corporation as defined by the IRS.

B. The corporation has accumulated earnings and profits and has excess net passive income.

C. All of the shareholders agree to convert the S corporation to a C corporation.

D. The election is revoked.

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Answer #2

The answer to this would be option C.

If all shareholders agree to convert the S corp into a C Corp it does not lead to termination of S corp election.

Option D is a method of voluntary termination of S corp election.

Options A and B are involuntary ways in which the S corp election is terminated. These terminations occur because the rules of an S corp are broken.

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answered by: anonymous
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