SIE Understanding Products and Their Risks Question 65: Answer and Explanation

Question: 65

Which of the following would NOT be a direct participation program?

• A. Subchapter C corporation
• B. Subchapter S corporation
• C. Limited partnership
• D. Limited liability company

Correct Answer: A

Explanation:

A: Choice A is correct because subchapter corporations are taxed, and stockholders pay income tax on dividends. Choices B, C, and D are incorrect because they could all be a DPP.