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    S Corporation restrictions/Investment Income

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    4. What restrictions are placed on an S corporation to be able to make a valid S election?

    5. What is included in investment income? What is the limit on the deduction for investment interest?

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    Solution Preview

    A valid S corp election can be made if

    1. All the shareholders consent
    2. The entity must be a domestic corporation
    3. All the shareholders must be individuals
    4. All the shareholders must be citizens or residents of the USA
    5. The corporation can have only one class of ...

    Solution Summary

    The solution lists the six criteria for a valid S-Corporation election to be accepted. For the second question, the solution presents a 100 word discussion about the definition of investment income including limitations and carryover provisions.