Question 1

Separately stated items are listed on Schedule _________________________ of the Form 1120S.

Accepted Answer

The answer of Separately stated items are listed on Schedule...

Question 2

Tax-exempt income is not separately stated on Schedule K of Form 1120S.

Accepted Answer

A) True 
 B)False

Question 3

Bidden, Inc., a calendar year S corporation, incurred the following items. $$\begin{array} { l r } 
\text { Sales } & \$ 130,000 \
\text { Depreciation recapture income } & 12,000 \
\text { Short-term capital gain } & 30,000 \
\text { Cost of goods sold } & ( 42,000 ) \
\text { Municipal bond interest income } & 7,000 \
\text { Administrative expenses } & ( 15,000 ) \
\text { Depreciation expense } & ( 17,000 ) \
\text { Charitable contributions } & ( 14,000 )
\end{array}$$ ?
Calculate Bidden's nonseparately computed income.

Accepted Answer

\[\begin{array} { l r r } 
\text { Sales

Question 4

Pepper, Inc., an S corporation in Norfolk, Virginia, has revenues of $400,000, taxable interest of $380,000, operating expenses of $250,000, and deductions attributable to the interest income of $140,000. Calculate any passive investment income penalty tax payable by this corporation.

Accepted Answer

The S corporation pa

Question 5

An S corporation shareholder's stock basis includes his or her direct investments plus a ratable share of any corporate liabilities.

Accepted Answer

A) True 
 B)False

Question 6

An S corporation can claim a deduction for its NOL carryovers.

Accepted Answer

A) True 
 B)False

Question 7

A distribution from OAA is taxable.

Accepted Answer

A) True 
 B)False

Question 8

On January 2, 2015, Tim loans his S corporation $10,000. By the end of 2015, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000. During 2016, the company's operating income is $10,000. The company makes 2016 distributions to Tim of $8,000. Tim reports a(n):

Accepted Answer

A) $2,000 LTCG. 
B) $8,000 LTCG. 
C) Stock basis of $2,000. 
D) Loan basis of $10,000. 
A) $2,000 LTCG. 
B) $8,000 LTCG. 
C) Stock basis of $2,000. 
D) Loan basis of $10,000.

Question 9

Compare the distribution of property rules for an S corporation with the corresponding partnership rules.

Accepted Answer

The major difference involves distributi

Question 10

If any entity electing S status is currently a C corporation, NOL carryovers from prior years ____________________ be used in an S corporation year.

Accepted Answer

The answer of If any entity electing S status is...

Question 11

Explain the OAA concept.

Accepted Answer

S corporations report changes in the AAA

Question 12

Yates Corporation elects S status, effective for calendar year 2016. Yates' only asset has a basis of $50,200 and a fair market value of $110,400 as of January 1, 2016. The asset is sold at the end of 2016 for $130,800. What amount must Mark Farris, a 60% owner and subject to a 15% income tax rate, pay, if any?

Accepted Answer

A) $5,358 
B) $12,642 
C) $21,070 
D) $35,718 
A) $5,358 
B) $12,642 
C) $21,070 
D) $35,718

Question 13

Tax-exempt income at the corporate level flows through as exempt to S shareholders.

Accepted Answer

A) True 
 B)False

Question 14

Stock basis first is increased by income items, then ____________________ by distributions, and finally decreased by ____________________.

Accepted Answer

The answer of Stock basis first is increased by income...

Question 15

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 16

Any distribution made by an S corporation during a tax year is taken into account before accounting for the year's losses.

Accepted Answer

A) True 
 B)False

Question 17

An S corporation cannot incur a tax liability at the corporation level.

Accepted Answer

A) True 
 B)False

Question 18

The Schedule M-3 is the same for a C corporation and an S corporation.

Accepted Answer

A) True 
 B)False

Question 19

What method is used to allocate S corporation income or losses (unless an election to the contrary is made)?

Accepted Answer

A) Any method agreed to by all of the shareholders. 
B) Per-day allocation. 
C) FIFO method. 
D) LIFO method. 
E) Some other method. 
A) Any method agreed to by all of the shareholders. 
B) Per-day allocation. 
C) FIFO method. 
D) LIFO method. 
E) Some other method.

Question 20

Most IRAs cannot own stock in an S corporation.

Accepted Answer

A) True 
 B)False

Separately stated items are listed on Schedule _________________________ of the Form 1120S.

Tax-exempt income is not separately stated on Schedule K of Form 1120S.

Pepper, Inc., an S corporation in Norfolk, Virginia, has revenues of $400,000, taxable interest of $380,000, operating expenses of $250,000, and deductions attributable to the interest income of $140,000. Calculate any passive investment income penalty tax payable by this corporation.

An S corporation shareholder's stock basis includes his or her direct investments plus a ratable share of any corporate liabilities.

An S corporation can claim a deduction for its NOL carryovers.

A distribution from OAA is taxable.

On January 2, 2015, Tim loans his S corporation $10,000. By the end of 2015, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000. During 2016, the company's operating income is $10,000. The company makes 2016 distributions to Tim of $8,000. Tim reports a(n):

Compare the distribution of property rules for an S corporation with the corresponding partnership rules.

If any entity electing S status is currently a C corporation, NOL carryovers from prior years ____________________ be used in an S corporation year.

Explain the OAA concept.

Tax-exempt income at the corporate level flows through as exempt to S shareholders.

Stock basis first is increased by income items, then by distributions, and finally decreased by .

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.

Any distribution made by an S corporation during a tax year is taken into account before accounting for the year's losses.

An S corporation cannot incur a tax liability at the corporation level.

The Schedule M-3 is the same for a C corporation and an S corporation.

What method is used to allocate S corporation income or losses (unless an election to the contrary is made)?

Most IRAs cannot own stock in an S corporation.

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

Multi-State Corporate Taxations

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 12: S Corporations

Separately stated items are listed on Schedule _________________________ of the Form 1120S.

Tax-exempt income is not separately stated on Schedule K of Form 1120S.

Pepper, Inc., an S corporation in Norfolk, Virginia, has revenues of $400,000, taxable interest of $380,000, operating expenses of $250,000, and deductions attributable to the interest income of $140,000. Calculate any passive investment income penalty tax payable by this corporation.

An S corporation shareholder's stock basis includes his or her direct investments plus a ratable share of any corporate liabilities.

An S corporation can claim a deduction for its NOL carryovers.

A distribution from OAA is taxable.

On January 2, 2015, Tim loans his S corporation $10,000. By the end of 2015, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000. During 2016, the company's operating income is $10,000. The company makes 2016 distributions to Tim of $8,000. Tim reports a(n):

Compare the distribution of property rules for an S corporation with the corresponding partnership rules.

If any entity electing S status is currently a C corporation, NOL carryovers from prior years ____________________ be used in an S corporation year.

Explain the OAA concept.

Tax-exempt income at the corporate level flows through as exempt to S shareholders.

Stock basis first is increased by income items, then ____________________ by distributions, and finally decreased by ____________________.

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.

Any distribution made by an S corporation during a tax year is taken into account before accounting for the year's losses.

An S corporation cannot incur a tax liability at the corporation level.

The Schedule M-3 is the same for a C corporation and an S corporation.

What method is used to allocate S corporation income or losses (unless an election to the contrary is made)?

Most IRAs cannot own stock in an S corporation.

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

Multi-State Corporate Taxations

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Stock basis first is increased by income items, then by distributions, and finally decreased by .