Exam 11: S Corporations

Alligood Corporation has two classes of common stock outstanding.The Class A and Class B common stock give the shareholders identical rights and interests in the profits and assets of the corporation.Class A stock has one vote per share.Class B stock is nonvoting.Alligood Corporation may

Which of the following items is not separately stated for an S corporation?

Which one of the following is not one of the corporation-related requirements for S corporation status?

Up to six generations of a family are considered as one shareholder for purposes of the 100-shareholder limit.

An electing S corporation has a $30,000 ordinary loss for the nonleap year.On January 1,Beverly and Sonya own equally all of the S corporation stock.On the 146th day of the year,Beverly gives her one-half of the S corporation stock to her daughter Becky.How much of the $30,000 ordinary loss is allocated to Beverly?

Identify which of the following statements is false.

Identify which of the following statements is false.

Identify which of the following statements is true.

Davies Corporation is a calendar-year taxpayer that is owned equally by Vivian,Rob,Danny,and Doug Davies.At the close of business on May 31,Rob Davies sells his 25% stock interest to Paula Bryan.Which of the following statements about the S election is correct?

Helmut and Sergei own all the stock of Zappo Corporation,a calendar-year domestic corporation.On January 30 of the current year,Sergei sells his entire interest in the Zappo stock to Nils.All three individuals are U.S.citizens.Can an S election be made for the current year?

For an S corporation to elect to use a fiscal year other than a permitted year,the fiscal year elected must have a maximum deferral period of

Which of the following tax levies imposed on an S corporation are required to be paid by using estimated tax payments?

An electing S corporation has a $30,000 ordinary loss for the non-leap year.On January 1,Beverly and Sonya own equally all of the S corporation stock.On the 146th day of the year,Beverly gives her one-half of the S corporation stock to her daughter Becky.How much of the $30,000 ordinary loss is allocated to Sonya?

An S corporation is permitted to claim

Chuck Corporation reports the following results for this year: At the end of this year,Chuck's E&P for its C corporation tax years amount to $30,000.Compute Chuck Corporation's excess net passive income.

The Vanity Corporation organized and began operations in January.The corporation's ten equal shareholders elect to have Vanity taxed as an S corporation,and the election and necessary consents are filed in a timely manner.For its first tax year ended December 31,Vanity has ordinary income of $64,000 and short-term capital gains of $16,000.During the year,it distributes $30,000 in cash equally to its ten shareholders.For the year,how much income should each shareholder report and how should it be characterized?

David owns 25% of an S corporation's stock (a capital asset)for the first three months of the S corporation's tax year.During the year,the S corporation has $16,000 of ordinary income and $32,000 of long-term capital gain.David starts the year with a basis of $50,000 in his S corporation stock and sells the stock for $56,000 on April 1 of the year.Assuming all months have 30 days,how much gain/loss does David report on the sale of the stock and what is its character?

Arnie is a 50% shareholder in Energy Corporation,an S corporation.The S corporation had an $80,000 ordinary loss last year and $10,000 of ordinary income this year.Before accounting for last year's losses,Arnie's basis in his Energy stock is $32,000 and Energy owed Arnie $4,000 (an unsecured note having a basis of $4,000)at the end of last year.In addition,Energy had $100,000 of other liabilities owed to creditors other than Arnie at the end of last year.What income and loss must Arnie report on his current return as a result of owning the Energy stock (ignoring the at-risk and passive activity limitations)?

VJ Corporation is to be owned equally by Vic and Joe.The corporation will be formed by exchanging the assets and liabilities of the V & J Manufacturing Partnership for all the corporation's stock on September 1 of the current year.Both shareholders use the calendar year as their tax year and desire to make an S election.What tax issues should Vic and Joe consider with respect to the incorporation?

King Corporation,a cash method taxpayer that uses the calendar year as its tax year,was incorporated on June 1,1984.The corporation made its initial S election on December 1 of last year,effective for the current tax year.Earnings and profits of $60,000 have been retained from C corporation tax years.Which one of the following events results in the recognition of a built-in gain?