the Election. Orlando Corporation, a calendar year
taxpayer, has been an S corporation for several years. On July 10, 2009, Orlando
authorizes a second class of nonvoting preferred stock that pays a 10% annual
dividend. The corporation issues the stock to Sid on September 12, 2009, to
raise additional equity capital. Sid owns no other Orlando stock.
a. Does Orlando’s S election terminate? If so, when is the
b. What tax returns must Orlando file for 2009? When are they due?
c. How would your answer to Parts a and b change if instead the
second class of stock were nonvoting Class B common stock?
Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.