Which of the following events will cause termination or revocation of the S election for a calendar year corporation? When is the termination or revocation effective? (Assume all other requirements for an S election are met and that any termination is not inadvertent.)
a. Best Corporation has 100 qualifying S corporation shareholders. Sam dies on October 13, and the estate holds his stock for the rest of the year.
b. Assume the same facts as in Part a except the estate distributes the stock to Sam’s child before the end of the tax year. Sam’s child did not previously own any Best stock.
c. Best issues nonvoting common stock to Susan’s two children during the current year. Susan’s children did not previously own any Best stock.
d. Shareholders Susan, Ted, and Tim, who own 60% of the Best stock, file the necessary form on October 1 to revoke the election as of this date. All three shareholders are calendar year taxpayers.