Question 1

A termination occurs on the day that a corporation ____________________ to be an S corporation.

Accepted Answer

The answer of A termination occurs on the day that...

Question 2

Some ____________________ taxation rules apply to an S corporation.

Accepted Answer

partnershi

Question 3

____________________ husband and wife must consent to an S election if they own their stock jointly.

Accepted Answer

The answer of ____________________ husband and wife must consent to...

Question 4

Which item has no effect on an S corporation's AAA?

Accepted Answer

A)  Stock purchase by a shareholder. 
B)  Interest expense. 
C)  Cost of goods sold. 
D)  Capital loss. 
E)  All of the above modify AAA. 
A)  Stock purchase by a shareholder. 
B)  Interest expense. 
C)  Cost of goods sold. 
D)  Capital loss. 
E)  All of the above modify AAA.

Question 5

Alomar, a cash basis S corporation in Orlando, Florida, holds the following assets and liabilities on January 1, 2015, the date the S election is made.   
​
During 2015, Alomar collects the accounts receivable and pays the accounts payable. The land is sold for $3 million, and the taxable income for the year is $590,000. Calculate any built-in gains tax.

Accepted Answer

$206,500. The net unrealized built-in ga

Question 6

You are given the following facts about a 40% owner of an S corporation, and you are asked to prepare her ending stock basis.   ​

Accepted Answer

A)  $71,600 
B)  $74,120 
C)  $76,220 
D)  $78,920 
A)  $71,600 
B)  $74,120 
C)  $76,220 
D)  $78,920

Question 7

You are given the following facts about a 50% owner of an S corporation. Compute his ending stock basis.   ​

Accepted Answer

A)  $80,950 
B)  $85,750 
C)  $100,100 
D)  $106,225 
E)  Some other amount 
A)  $80,950 
B)  $85,750 
C)  $100,100 
D)  $106,225 
E)  Some other amount

Question 8

A distribution of cash or other property by an S corporation to shareholders that does not exceed the balance of AAA during a one-year period following an S election termination receives special capital gain treatment.

Accepted Answer

A) True 
 B)False

Question 9

An S corporation cannot be a shareholder in another corporation.

Accepted Answer

A) True 
 B)False

Question 10

An S shareholder who dies during the S corporation tax year must report his or her share of the pro rata income (loss) items up to the date of death, on the final individual tax return.

Accepted Answer

A) True 
 B)False

Question 11

What statement is correct with respect to an S corporation?

Accepted Answer

A)  There are now more LLCs than S corporations. 
B)  S corporation status allows shareholders immediately to realize tax benefits from corporate losses. 
C)  An S corporation is prohibited from being a member of an affiliated group. 
D)  An LLP may own stock in an S corporation. 
E)  None of the above statements is correct. 
A)  There are now more LLCs than S corporations. 
B)  S corporation status allows shareholders immediately to realize tax benefits from corporate losses. 
C)  An S corporation is prohibited from being a member of an affiliated group. 
D)  An LLP may own stock in an S corporation. 
E)  None of the above statements is correct.

Question 12

Persons who were S shareholders during any part of the year before the election date, but were not shareholders when the election was made, also must consent to an S election.

Accepted Answer

A) True 
 B)False

Question 13

An S election made before becoming a corporation is valid only beginning with the first 12-month tax year.

Accepted Answer

A) True 
 B)False

Question 14

Which could constitute a second class of stock?

Accepted Answer

A)  Treasury stock. 
B)  Phantom stock. 
C)  Unexercised stock options. 
D)  Warrants. 
E)  None of the above. 
A)  Treasury stock. 
B)  Phantom stock. 
C)  Unexercised stock options. 
D)  Warrants. 
E)  None of the above.

Question 15

The choice of a flow-through entity for a closely-held corporation often is between a(n) ____________________ (a Federal tax entity) and a(n) ____________________ (a state tax entity).

Accepted Answer

S corporat

Question 16

All tax preference items flow through the S corporation, to be included in the shareholders' AMT calculations.

Accepted Answer

A) True 
 B)False

Question 17

The passive investment income of an S corporation includes net capital gains from the sale of stocks and securities.

Accepted Answer

A) True 
 B)False

Question 18

During 2015, Oxen Corporation incurs the following transactions.   ​
Oxen maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder, Megan. As a result, Megan must recognize:

Accepted Answer

A)  Ordinary income of $103,000. 
B)  Ordinary income of $103,000 and long-term capital gain of $5,000. 
C)  Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss. 
D)  Ordinary income of $109,000. 
A)  Ordinary income of $103,000. 
B)  Ordinary income of $103,000 and long-term capital gain of $5,000. 
C)  Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss. 
D)  Ordinary income of $109,000.

Question 19

Beginning in 2015, the AAA of Amit, Inc., an S corporation, has a balance of $614,000. During the year, the following items occur.   ​
Amit's ending AAA balance is:

Accepted Answer

A)  $1,055,620. 
B)  $1,185,150. 
C)  $1,191,150. 
D)  $1,242,150. 
E)  Some other amount. 
A)  $1,055,620. 
B)  $1,185,150. 
C)  $1,191,150. 
D)  $1,242,150. 
E)  Some other amount.

Question 20

Estela, Inc., a calendar year S corporation, incurred the following items in 2015.   
​
Calculate Estela's nonseparately computed income.

Accepted Answer

The answer of Estela, Inc., a calendar year S corporation,...

A termination occurs on the day that a corporation ____________________ to be an S corporation.

Some ____________________ taxation rules apply to an S corporation.

____________________ husband and wife must consent to an S election if they own their stock jointly.

Which item has no effect on an S corporation's AAA?

You are given the following facts about a 40% owner of an S corporation, and you are asked to prepare her ending stock basis.

You are given the following facts about a 50% owner of an S corporation. Compute his ending stock basis.

A distribution of cash or other property by an S corporation to shareholders that does not exceed the balance of AAA during a one-year period following an S election termination receives special capital gain treatment.

An S corporation cannot be a shareholder in another corporation.

An S shareholder who dies during the S corporation tax year must report his or her share of the pro rata income (loss) items up to the date of death, on the final individual tax return.

What statement is correct with respect to an S corporation?

Persons who were S shareholders during any part of the year before the election date, but were not shareholders when the election was made, also must consent to an S election.

An S election made before becoming a corporation is valid only beginning with the first 12-month tax year.

Which could constitute a second class of stock?

The choice of a flow-through entity for a closely-held corporation often is between a(n) (a Federal tax entity) and a(n) (a state tax entity).

All tax preference items flow through the S corporation, to be included in the shareholders' AMT calculations.

The passive investment income of an S corporation includes net capital gains from the sale of stocks and securities.

During 2015, Oxen Corporation incurs the following transactions. Oxen maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder, Megan. As a result, Megan must recognize:

Beginning in 2015, the AAA of Amit, Inc., an S corporation, has a balance of $614,000. During the year, the following items occur. Amit's ending AAA balance is:

Estela, Inc., a calendar year S corporation, incurred the following items in 2015. Calculate Estela's nonseparately computed income.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operation, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 12: S Corporations

A termination occurs on the day that a corporation ____________________ to be an S corporation.

Some ____________________ taxation rules apply to an S corporation.

____________________ husband and wife must consent to an S election if they own their stock jointly.

Which item has no effect on an S corporation's AAA?

You are given the following facts about a 40% owner of an S corporation, and you are asked to prepare her ending stock basis. ​

You are given the following facts about a 50% owner of an S corporation. Compute his ending stock basis. ​

A distribution of cash or other property by an S corporation to shareholders that does not exceed the balance of AAA during a one-year period following an S election termination receives special capital gain treatment.

An S corporation cannot be a shareholder in another corporation.

An S shareholder who dies during the S corporation tax year must report his or her share of the pro rata income (loss) items up to the date of death, on the final individual tax return.

What statement is correct with respect to an S corporation?

Persons who were S shareholders during any part of the year before the election date, but were not shareholders when the election was made, also must consent to an S election.

An S election made before becoming a corporation is valid only beginning with the first 12-month tax year.

Which could constitute a second class of stock?

The choice of a flow-through entity for a closely-held corporation often is between a(n) ____________________ (a Federal tax entity) and a(n) ____________________ (a state tax entity).

All tax preference items flow through the S corporation, to be included in the shareholders' AMT calculations.

The passive investment income of an S corporation includes net capital gains from the sale of stocks and securities.

During 2015, Oxen Corporation incurs the following transactions. ​ Oxen maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder, Megan. As a result, Megan must recognize:

Beginning in 2015, the AAA of Amit, Inc., an S corporation, has a balance of $614,000. During the year, the following items occur. ​ Amit's ending AAA balance is:

Estela, Inc., a calendar year S corporation, incurred the following items in 2015. ​ Calculate Estela's nonseparately computed income.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operation, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

You are given the following facts about a 40% owner of an S corporation, and you are asked to prepare her ending stock basis.

You are given the following facts about a 50% owner of an S corporation. Compute his ending stock basis.

The choice of a flow-through entity for a closely-held corporation often is between a(n) (a Federal tax entity) and a(n) (a state tax entity).

During 2015, Oxen Corporation incurs the following transactions. Oxen maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder, Megan. As a result, Megan must recognize:

Beginning in 2015, the AAA of Amit, Inc., an S corporation, has a balance of $614,000. During the year, the following items occur. Amit's ending AAA balance is:

Estela, Inc., a calendar year S corporation, incurred the following items in 2015. Calculate Estela's nonseparately computed income.