A. Whether a C corporation that has preferred stock and common stock with both voting and nonvoting rights, eight shareholders among whom there are a Swedish individual and Plantation Sugar partnership, may elect to be an S corporation, under section 1361(b)(1)(B), 1361(b)(1)(C) and 1361(b)(1)(D)?
B. Whether all the shareholders must consent to the election of S status, under section 1362(a)(2)?
C. Whether the election of S status is effective if a C corporation does not meet all the requirements in the election year, under Reg §1.1362-6(2)(ii)(B)?
D. Whether an S corporation can keep its C corporation tax year, which ends in June 30, without documenting any business purpose, under the provision of section 1378(b)?
E. Whether a newly
Reg §1.1361-1(I)(1) further provides that so long as all of the outstanding shares have identical distribution and liquidation rights, they are one class of stock, irrespective of voting or nonvoting rights attached.
B.
All shareholders of a small business corporation must have unanimous consent to the election of an S corporation status, prescribed by section 1362(a)(2), or else the election is not valid.
C.
If a corporation elects an S status at any time in the preceding year or within 2½ months of the taxable year it is in, it become an S corporation as of the current taxable year, under section 1362(b)(1). However, if a corporation is not a small business corporation for the entire year before the election date, or if any shareholder who has stocks before the election date that does not consent to the election of S status, Reg §1.1362-6(2)(ii)(B) states that the corporation will only become an S corporation for the following taxable year.
D.
Under section 1378(b), an S corporation must adopt a calendar year-end, unless it can establish a business purpose for using a fiscal year-end. Furthermore, in order to retain the fiscal year it is using, an electing S corporation shall obtain the approval from the Commissioner, prescribed by Reg §1.1378-1(d).
E.
According to section 1363(d)(1), if an S corporation was a C corporation before and it used LIFO method to