An S corporation has stock that is widely held and available for sale to the general public. True False

## Step 1<br />An S corporation is a special type of corporation that is designed to avoid the double taxation drawback of C corporations. S corporations pass corporate income, losses, deductions, and credit through to their shareholders for federal tax purposes. Shareholders report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates.<br />## Step 2<br />However, S corporations are subject to several restrictions. One of these restrictions is that they cannot have more than 100 shareholders. <br />## Step 3<br />Another restriction is that S corporations cannot have corporate shareholders, which means they cannot be publicly traded. <br />## Step 4<br />Given these restrictions, the statement that an S corporation has stock that is widely held and available for sale to the general public is false.