Exam 20: Corporations and Partnerships

In 2019, Creeper Corporation had a $4,000 net long-term capital loss that it could not carry back.For 2020, it had the following capital transactions. Long-term capital gain \ 2,000 Short-term capital gain 3,000 As a result of these transactions, for 2020 Creeper has a:

Using the legend provided, classify each statement accordingly. -Excess charitable contributions can be carried over for five years.

Using the legend provided, classify each statement accordingly. -Recapture of depreciation on real property can be more severe.

Using the legend provided, classify each statement accordingly. -All of the appreciation on ordinary income property donated to charity can be claimed as a deduction.

Madison, a calendar year individual taxpayer, has the following results for her current taxable year: profit from operations of $200,000 and long-term capital loss from investments of $20,000.As to the capital loss, Madison may:

Using the legend provided, classify each statement accordingly. -Excess long-term capital losses are carried forward as short-term capital losses.

Jacob is a shareholder in Robin Corporation, an S corporation.His share of Robin's activities for the current year is a short-term capital gain of $80,000 and an operating loss of $50,000.As a result of these transactions, Jacob should increase his basis in the Robin stock by $30,000.

In computing the taxable income (or loss) of an S corporation, an NOL carryover from a prior year is not allowed.

In computing the NOL of a corporation, the dividends received deduction cannot be claimed.

The basis of stock received in a §351 transaction is:

To improve its liquidity, the shareholders of Spoonbill Corporation make a capital contribution of $200,000 in cash.To facilitate the building of a manufacturing plant, the City of Wichita donates land (worth $800,000) to Spoonbill.As a result of these 2020 transactions, Spoonbill has:

Jim, Betty, and Bill form Crow Corporation.Both Jim and Betty contribute cash of $500,000, and Bill contributes land (basis of $550,000; fair market value of $600,000).Each shareholder receives one-third of Crow's stock, and Bill also receives $100,000 in cash.Which, if any, of the following choices is a correct result of the incorporation?

Using the legend provided, classify each statement accordingly. -Amount the corporation borrows from a bank increases the basis its shareholders have in their stock.

The taxable income (or loss) of an S corporation is allocated to each shareholder on a per share and per day of stock ownership basis.

Matching Using the legend provided, classify each statement accordingly. -Net short-term capital gains are taxed as ordinary income.

Jerry is the sole shareholder of Bluejay Corporation, a calendar year C corporation.As of January 1, 2020, Bluejay has a deficit of $50,000 in accumulated E & P.During 2020, it has current E & P of $300,000 and distributes a cash dividend of $400,000 to its shareholder.As of January 1, 2020, Jerry's basis in the Bluejay stock is $75,000.One result of these transactions is:

In computing the taxable income (or loss) of an S corporation, a charitable contributions deduction is allowed.

In the formation of a corporation under § 351, the shareholder's basis in the stock received is decreased by loss recognized and boot received.

Using the legend provided, classify each statement accordingly. -Corporations can have both common and preferred stock outstanding.

In determining whether an entity is to be recognized as a corporation for Federal income tax purposes, classification under state law is not conclusive.