[Anonymous]

Which of the following statements concerning the eligibility requirements for S Corps is NOT correct?

A. An S Corp is permitted to own 100% of the stock of a C corp.

B. An S Corp is permited to own 75% of the stock of another S Corp

C. An S Corp is permitted to be a partner in a partnership.

D. A partnership is not permitted to be a shareholder of an S corp.

A. The eligibility requirements restrict S corporation shareholders to individuals (other than nonresident aliens), estates, and certain trusts. Partnerships and C corporations are not permitted to own stock in an S corporation. However, an S corporation is permitted to be a partner in a partnership, and may own any percentage of stock of a C corporation, as well as own 100% of the stock of a qualified subchapter S subsidiary.

---

So an S Corp can own 100% of the stock in another S Corp but it cant own 75%?

[calicpa]

https://www.another71.com/cpa-exam-forum/topic/reg-question-3

I asked the same exact question. Yes exactly. has to be all or nothing.

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[calicpa]

https://www.another71.com/cpa-exam-forum/topic/reg-question-3

I asked the same exact question. Yes exactly. has to be all or nothing.

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[Anonymous]

Thanks, and I see you're almost done. Hope you'll get a passing score on the next wave of release!

[Anonymous]

Thanks, and I see you're almost done. Hope you'll get a passing score on the next wave of release!

[calicpa]

thanks!

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[calicpa]

thanks!

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[h0wdyus]

The question asks “IS NOT CORRECT ” so we need to find the WRONG answer out of the 4 choices.

The wrong Answer is ‘A' because a S corp can own upto ( permitted to) 100% in another S corp. The answer A is wrong because S corp is permitted to own UPTO 100% and not LIMITED to 75%. So a S Corp can own 75% of S corp and still be eligible. The Wrong answer is suggesting that you CANNOT own more than 75% of another S corp, while that is not true, you can own upto 100%.

my 2 cents.

FAR - 81 29th Aug 2013
AUD - 84
REG - 82
BEC - 89 29th Aug 2014
Using Yager

FROM NJ

[h0wdyus]

The question asks “IS NOT CORRECT ” so we need to find the WRONG answer out of the 4 choices.

The wrong Answer is ‘A' because a S corp can own upto ( permitted to) 100% in another S corp. The answer A is wrong because S corp is permitted to own UPTO 100% and not LIMITED to 75%. So a S Corp can own 75% of S corp and still be eligible. The Wrong answer is suggesting that you CANNOT own more than 75% of another S corp, while that is not true, you can own upto 100%.

my 2 cents.

FAR - 81 29th Aug 2013
AUD - 84
REG - 82
BEC - 89 29th Aug 2014
Using Yager

FROM NJ

[Author]

Replies