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Hi can someone help me with this question please? Jumbo, Inc. was formed as an S corporation with 5 shareholders (named A, B, C, D

Hi can someone help me with this question please?

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Jumbo, Inc. was formed as an \"S\" corporation with 5 shareholders (named A, B, C, D & E), with each owning 20 shares of stock. A,B & C are the ofcers and directors of Jumbo, Inc., which earned a prot of 200k in 2018. Instead of declaring a dividend and paying out the prots to the shareholders, the company used the funds to purchase new equipment in 2019. In addition, in 2017 D transferred her shares to an LLC owned solely by D. The issue(s) for the shareholders is/are: I. Tax must be paid by the individual shareholders for the 2018 prot II. No problem, they're making money! III. The IRS could re-characterize the S Corp to a C Corp IV. The IRS could re-characterize the taxes owed to the LLC. 0 land IV 0 land III 0 II o

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