Exam 11: US Corporations

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?

Boxer Corporation,a C corporation,elects on June 30 of last year to make an S election for the current year.The net unrealized built-in gains at the beginning of the current year are $300,000.The net recognized built-in gains in the current year are $110,000.What is Boxer's built-in gains tax for the current year?

Which of the following statements about stock ownership is not correct?

The accumulated adjustments account is the cumulative total of ordinary income or loss and separately stated items (excluding tax-exempt income and expenses)for the most recent continuous period during which the corporation has been an S corporation.

Can loss or credit carryforwards from a previous C corporation tax year help reduce the built-in gains tax?

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?

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

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

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.

Zebra Corporation has always been an S corporation and is 100% owned by Paul.Paul has a basis of $40,000 in his Zebra stock at the beginning of the year.During the year,Zebra has an ordinary loss of $20,000 and a long-term capital gain of $10,000.In addition,Zebra Corporation distributed $55,000 in cash to Paul on December 1.Will the distribution cause Paul to recognize a gain? If so,what are its amount and character?

Connie's Restaurant has been an S corporation since it was formed in 2006.Its results for the previous year are as follows: What are Connie's separately stated items? What is the S corporation's ordinary income?

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

An S corporation is permitted an automatic extension of time for filing its tax return.The automatic extension period is

The recognition period for the built-in gains tax extends for how many years after the S election takes effect?

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

Garret and Hans own all the stock of GH Corporation.Garret sells all his GH stock to Olga on February 12.The next day,GH makes an S election.For the election to apply to the current year,who must consent to the election?

Potter Corporation reports the following results for the current year: At the end of the year,Potter's SubChapter E&P is $50,000.What is the amount of Potter's excess net passive income?

Identify which of the following statements is true.

King Corporation,an electing S corporation,is 100% owned by Crystal.On January 1 of the current year,her adjusted basis in the King stock is $30,000.During the year,King reports an ordinary loss of $30,000,tax-exempt municipal bond income of $15,000,dividend income from domestic corporations of $5,000,a long-term capital loss of $20,000,and a short-term capital loss of $30,000.What is Crystal's basis for the King stock at the end of the year?

Shamrock 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 has one vote per share.Class B is nonvoting.Can Shamrock Corporation make an S corporation election?