Several entrepreneurs form an S corporation. Under which of the following circumstances will the entrepreneurs risk losing their tax benefits?
150 new investors buy into the corporation during the year.
1 new member is a nonresident alien.
50% of the corporation's income is derived from passive investments in limited partnerships.
The corporation issues several classes of stock.
A) I, II, III and IV.
B) I only.
C) I and II.
D) I, II and III.
Answer: A) I, II, III and IV.