List five disadvantages of making an S election. ?(Select allthat? apply.)

A. An S corporation is subject to the personal holding companytax or the accumulated earnings tax if they elect to have a?year-end that is not a calendar year end.

B. Allocation of ordinary income or loss and the separatelystated items is based on the stock owned on each day of the taxyear. Special allocations of particular items are not? permitted,as they are in a partnership.

C. Dividends received by the S corporation are not eligible forthe? dividends-received deduction, as is the case for a Ccorporation.

D. A C corporation is treated as a separate tax entity from its?shareholders, thereby permitting its first? $50,000 of income to betaxed at a? 15% marginal rate instead of the? shareholder'smarginal rate.

E. S corporations are subject to an excess net passive incometax and a? built-in gains tax. Partnerships are not subject toeither of these taxes.

F. The S? corporation's earnings are taxed to the shareholderseven though they are not distributed. This treatment may requirethe corporation to make distributions or salary payments so theshareholder can pay taxes owed on the S? corporation'searnings.

G. The S? corporation's earnings are taxed to the shareholderswhen they are distributed. This treatment means the S corporationmight not distribute enough cash and then become subject to theaccumulated earnings tax

H. An S corporation is not restricted in the number ofshareholders it can have and the capital structure it can? use,except at least one shareholder must be an individual. Partnershipsand C corporations are not so restricted.

Please choose only five correct answers