Exam 11: S Corporations

When a Sec.444 fiscal-year election is made,the S corporation makes required payments to the IRS in order to continue to use the fiscal year as its tax year.Which of the following statements about the tax year is correct?

Identify which of the following statements is true.

Which of the following corporate tax levies are imposed on an S corporation?

Train Corporation is an S corporation that is owned equally by Carlos and Diane at the beginning of the year.On April 21 (the 111th day of Train's tax year)of the current year,Carlos sells all of his Train Corporation stock to Andre.How many days will be used when computing Carlos's share of S corporation income for this year (a non-leap year),assuming that a special income allocation election is not made?

Mashburn Corporation is an S corporation that uses a fiscal year ending June 30 as its tax year.When is Mashburn Corporation's income tax return due?

Cook's Outlet has been an S corporation since its inception six years ago.On January 1 of the current year,the corporation's two equal shareholders,Davis and Dane,had adjusted bases of $150,000 and $175,000,respectively,for their S corporation's stock.The shareholders plan to have the corporation distribute land with a $50,000 adjusted basis and a $200,000 FMV in the current year.Ordinary income is expected to be $180,000 in the current year.What tax issues should Davis and Dane consider with respect to the distribution?

Identify which of the following statements is true.

Identify which of the following statements is true.

If losses are suspended due to the lack of basis in S corporation stock,do the losses expire when the S election terminates?

Even if the termination of an S election is considered to be inadvertent,the election to terminate is irrevocable.

The S corporation rules were enacted to allow small corporations to enjoy the nontax advantages of the corporate form of business without being subject to the tax disadvantage of double taxation.

Cactus Corporation,an S Corporation,had accumulated earnings and profits of $100,000 at the beginning of 2011.Tex and Shirley each own 50% of the stock.Cactus does not make any distributions during 2011,but had $200,000 of ordinary income.In 2012,ordinary income was $100,000 and distributions were $100,000.What is Tex's ordinary income for 2012?

Robert Elk paid $100,000 for all of the single class of stock of Elkom Corporation,an electing S corporation,when incorporated in January,2007.Elkom's operating results and dividend distribution are as follows: What is Elk's basis for his Elkom stock on December 31 of 2007?

Cactus Corporation,an S Corporation,had accumulated earnings and profits of $100,000 at the beginning of 2009.Tex and Shirley each own 50% of the stock and have a basis in their stock of $50,000 on January 1,2009.Cactus does not make any distributions during 2009,but had $200,000 of ordinary income.In 2010,ordinary income was $100,000 and distributions were $100,000.What is Tex's basis at January 1,2011?

Mary,a U.S.citizen,owned 25% of the stock of Floran Corporation,an electing S corporation.At the time of her death,the Floran stock may go to all the following without affecting the S election except

Identify which of the following statements is true.

Identify which of the following statements is true.

Identify which of the following statements is true.

Cactus Corporation,an S Corporation,had accumulated earnings and profits of $100,000 at the beginning of 2008.Tex and Shirley each own 50% of the stock.Cactus does not make any distributions during 2008,but had $200,000 of ordinary income.In 2009,ordinary income was $100,000 and distributions were $100,000.What is Tex's ordinary income for 2008?

Power Corporation reports the following results: At the end of the year,Power's Subchapter C E&P is $50,000.What is Power Corporation's excess net passive income and its excess net passive income tax for the year?