S, a corporation, executes a binding agreement with its shareholders to modify its normal distribution policy by making upward adjustments of its distributions to those shareholders who bear heavier state tax burdens. The adjustments are based on a formula that will give the shareholders equal after-tax distributions.Does a second class of stock exist violating the S corporation requirements and on what grounds?

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The scenario you described raises a potential issue with S corporation requirements based on the creation of a second class of stock Heres why OneClas... View the full answer