Identify the tax issue or issues suggested by the following situations, and state each issue in the form of a question.
LSN, a calendar year S corporation, has 13 shareholders. Since its incorporation, LSN has retained over $800,000 income to reinvest in its business. Because LSN is a pass-through entity, the shareholders have paid tax on this undistributed income and increased their stock basis accordingly. The shareholders want to revoke the S election and operate LSN as a regular corporation. LSN has only $69,000 in its corporate bank account.

  • CreatedNovember 03, 2015
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