Foods Co.is for sale.The corporation has never had shareholdings in other corporations, and the company will be a small business corporation at the time of sale.Which of the following is not one of the conditions necessary in the 24 months preceding the sale of shares for qualified small business corporation status to apply for Foods?
A)Foods Co.must be a CCPC.
B)Foods Co's shares must not be owned by an unrelated person.
C)More than 50% of the fair market value of the assets must be 'active business' assets.
D)100% of the fair market value of the assets must be 'active business' assets.

Question

Quizplus · Accepted Answer

The condition "100% of the fair market value of the assets must be 'active business' assets" is not necessary for qualified small business corporation status to apply for Foods. The correct condition is "More than 50% of the fair market value of the assets must be 'active business' assets." A and B are also correct conditions - the company must be a CCPC and its shares must not be owned by an unrelated person.

Foods CoIs for Sale