Acc 455 Week 5 DQ

Wk 5 DQ's

What is a liquidating distribution? What is a nonliquidating distribution? Provide an example of each.

What is an inadvertent termination of an S election? How does an S corporation and its shareholders rectify an inadvertent termination? What could happen if a company fails to rectify the termination?

 What events will cause an S election to terminate? What would you recommend S corporations do to plan for an orderly termination of an S election?

 A C corporation has incurred substantial losses and the owners have decided to close the business. What considerations should the owners make in this termination? Should they consider making an S election and then later, terminating the S corporation? If you were their tax advisor, what would you recommend?