Identify which of the following statements is true. a. A nonresident alien can be an S corporation shareholder. b. A partnership can be an S corporation shareholder. c. An S corporation can have more than 100 shareholders, since families are treated as a single shareholder. d. All of the above are false.

Question

Olivia Payne

Business

9 December, 15:08

Identify which of the following statements is true. a. A nonresident alien can be an S corporation shareholder. b. A partnership can be an S corporation shareholder. c. An S corporation can have more than 100 shareholders, since families are treated as a single shareholder. d. All of the above are false.

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Answers (1)

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Jaida · Answer 1

a. A nonresident alien can be an S corporation shareholder. (However, generally, we can't see non resident aliens owning shares, but it is not illegal.)

c. An S corporation can have more than 100 shareholders, since families are treated as a single shareholder.

Explanation:

A nonresident alien is a person who is not a U. S. citizen and does not pass the green card or substantial presence tests used to determine tax status and citizenship. Foreign Students are a good example for this.

these non residents usually do not hold ownership in corporations.

The term "S corporation" means a "small business corporation".

S corporations limit is 100 members, however, since the family members are treated as "individual one person", the number 100 could change in the practical scenario.

The option d is obviously wrong!

Option b is incorrect as well. Corporations and Partnerships can not own stake in S corporations.