Question

Tone Loc and 89 of his biggest fans formed an S corporation, 2hit, Incorporated, as the original 90 shareholders. Tone then transferred some of his stock to his grandfather, four of Tone's cousins, five of Tone's children, three of Tone's grandchildren, and two close friends. According to the S corporation shareholder limit rules, how many shareholders does 2hit, Incorporated, have

Answer 1

Answer:

92 shareholders

Explanation:

According to the S corporation shareholder limit rules, family members count only as 1 shareholder. The meaning of family member is very broad, including spouses, uncles, aunts, children, grandparents, grandchildren, first cousins, and even ex-spouses count as members of the same family.

So that means that Tone Loc, his grandfather, his four cousins, his five children and three of his grandchildren, will all together count as just one shareholder.

His two friends are not included in his family.