Lesson: S Corporations: Eligibility and Election - Practice Questions

In this lesson, Nick Palazzolo, CPA, dives into the nuances of S Corporations through a series of insightful practice questions. By walking through each multiple-choice scenario, he clarifies how the allocation of non-separately stated income or loss is computed for a changing ownership interest when the books aren't closed—the “per share per day” method. He further demystifies the tax implications of built-in gains, explaining the safeguards against C-Corps exploiting S-Corp status for tax benefits. Throughout, Nick emphasizes the importance of understanding and memorizing these core concepts to navigate complex tax regulations effectively, leaving viewers with a solid grasp of S-Corp eligibility and election issues.