Exam 22: S Corporations

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.

Any excess of S corporation losses or deductions over the shareholder's combined stock and debt basis is suspended until there is a subsequent stock or debt basis.

On January 1,Bobby and Alice own equally all of the stock of an electing S corporation called Prairie Dirt Delight.The dirt company has a $60,000 loss for a non-leap year.On the 200th day of the year,Bobby sells his one-half of the stock to his son,Saul.How much of the $60,000 loss,if any,is allocated to Bobby?

When loss assets are distributed by an S corporation,a shareholder's basis is equal to the asset's fair market value.

On January 2,2014,Tim loans his S corporation $10,000.By the end of 2014,Tim's stock basis is zero,and the basis in his note has been reduced to $8,000.During 2015,the company's operating income is $10,000.The company makes 2015 distributions to Tim of $8,000.Tim reports a(n):

You are a 60% owner of an S corporation.Calculate your ending stock basis,based upon these facts. Beginning stock basis $52,600 Purchases of additional stock 15,000 Insurance premiums paid (nondeductible) 3,600 Tax-exempt interest income 5,230 Payroll tax penalty 3,770 Increase in AAA 22,400 Increase in OAA 5,800

An S corporation's separately stated items generally are identical to those separately stated by _________________________.

An S corporation must possess which of the following characteristics?

Discuss the two methods of allocating tax-related items to S corporation shareholders.

Yates Corporation elects S status,effective for calendar year 2015.Yates' only asset has a basis of $50,200 and a fair market value of $110,400 as of January 1,2015.The asset is sold at the end of 2015 for $130,800.What amount must Mark Farris,a 60% owner and subject to a 15% income tax rate,pay,if any?

An S election is made on the shareholder's Form 2553.

A new S corporation shareholder can revoke the S election unilaterally,if he/she owns how much of the existing S corporation's stock?

Which item does not appear on Schedule K of Form 1120S?

An S shareholder's stock basis is reduced by flow-through losses before accounting for distributions.

An estate may be a shareholder of an S corporation.

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

The § 1202 exclusion of gain is not available on disposition of S corporation stock.

Distribution of loss property by an S corporation to a shareholder generally should be _________________.

Any losses that are suspended under the at-risk rules are carried forward and are available during an S corporation's post-termination period.

It is not beneficial for an S corporation to issue § 1244 stock.