Orlando Corporation, a calendar year taxpayer, has been an S corporation for several years. On July 9, 2021, Orlando authorizes a second class of nonvoting preferred stock that pays a 10% annual dividend. The corporation issues the stock to Sid on September 11, 2021, to raise additional equity capital. Sid owns no other Orlando stock. 

a. Does Orlando's Selection terminate? If so, when is the termination effective? 

b. What tax returns must Orlando file for 2021? When are they due? 

c. How would your answer to Parts a and b change if instead the second class of stock were nonvoting Class B common stock?

Answer rating: 100% (QA)

A C E G 1 Orlando Corporation a calendar year taxpayer has been an S ... View the full answer