In its first year of operations, a corporation projects losses of $200,000. Since losses are involved, the corporation definitely should elect S corporation status.

Question

Quizplus · Accepted Answer

The statement is false. Whether or not a corporation should elect S corporation status is dependent on various factors such as the number of shareholders, ownership types, and tax considerations. The projection of losses alone does not determine the need for S corporation status.

In Its First Year of Operations, a Corporation Projects Losses