McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 33

Julie wants to create an S corporation called J's Dance Shoes (JDS).Describe how the items below affect her eligibility for an S election.a.Because Julie wants all her shareholders to have an equal say in the future of JDS, she gives them equal voting rights and decides shareholders who take a more active role in the firm will have priority in terms of distribution and liquidation rights.b.Julie decides to incorporate under the state laws of Utah, since that is where she lives.Once she gets her business up and running, however, she plans on doing extensive business in Mexico.