Question 1

Depletion in excess of basis in property causes a(n)____________ adjustment to an S shareholder's basis.

Accepted Answer

The answer of Depletion in excess of basis in property...

Question 2

Persons who were shareholders during any part of the year before the election date,but were not shareholders when the elction was made,also must consent to the election.

Accepted Answer

A) True 
 B)False

Question 3

Distributions of appreciated property by an S corporation are not taxable to the entity.

Accepted Answer

A) True 
 B)False

Question 4

A cash basis calendar year C corporation in Athens,Georgia,has $100,000 of accounts receivable on the date of its conversion to an S corporation on February 14.By the end of the year,$60,000 of these receivables are collected.Calculate any built-in gains tax,assuming that there is sufficient taxable income.

Accepted Answer

A) $0. 
B) $21,000. 
C) $28,000. 
D) $35,000. 
E) Some other amount. 
A) $0. 
B) $21,000. 
C) $28,000. 
D) $35,000. 
E) Some other amount.

Question 5

Which could constitute a second class of stock?

Accepted Answer

A) Treasury stock. 
B) Phantom stock. 
C) Unexercised stock options. 
D) Warrants. 
E) None of the above. 
A) Treasury stock. 
B) Phantom stock. 
C) Unexercised stock options. 
D) Warrants. 
E) None of the above.

Question 6

All tax preference items flow through the S corporation,to be included in the shareholders' AMT calculations.

Accepted Answer

A) True 
 B)False

Question 7

If any entity electing S status is currently a C corporation,NOL carryovers from prior years ________________ be used in an S corporation year.

Accepted Answer

The answer of If any entity electing S status is...

Question 8

When an S corporation liquidates,which of its tax attributes disappear?

Accepted Answer

A) PTI. 
B) AAA. 
C) AEP. 
D) Suspended losses. 
E) All of the above. 
A) PTI. 
B) AAA. 
C) AEP. 
D) Suspended losses. 
E) All of the above.

Question 9

An item that appears in the "Other Adjustments Account" affects basis,but not AAA,such as tax-exempt life insurance proceeds.

Accepted Answer

A) True 
 B)False

Question 10

Which,if any,of the following can be eligible shareholders of an S corporation?

Accepted Answer

A) A child, age 10. 
B) A resident alien. 
C) A voting trust. 
D) An estate of a deceased shareholder. 
E) All of the above can own stock. 
A) A child, age 10. 
B) A resident alien. 
C) A voting trust. 
D) An estate of a deceased shareholder. 
E) All of the above can own stock.

Question 11

The benefits of the AAA can be ____________________ from one shareholder to another _________________________.

Accepted Answer

The answer of The benefits of the AAA can be...

Question 12

The _______________ and ______________ limitations apply to losses generated by an S Corporation.

Accepted Answer

at-risk an

Question 13

The S corporation is entitled to a deduction for its NOL carryovers.

Accepted Answer

A) True 
 B)False

Question 14

A calendar year C corporation has a $33,000 NOL in 2007,but elects S status for 2008 and generates an NOL of $30,000 in 2008. At all times during 2008,the stock of the corporation was owned by the same 10 shareholders,each of whom owned 10% of the stock. Kris,one of the 10 shareholders,has an adjusted stock basis of $2,200 at the beginning of 2008. What amount of the loss,if any,is deductible by Kris in 2008?

Accepted Answer

A) None. 
B) $2,200. 
C) $3,000. 
D) $6,300. 
E) Some other amount. 
A) None. 
B) $2,200. 
C) $3,000. 
D) $6,300. 
E) Some other amount.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The § 1374 tax is a shareholder-level tax on any built-in gain recognized when an S corporation disposes of an asset in a taxable disposition within 10 calendar years after the latest date on which the S election took effect.

Accepted Answer

A) True 
 B)False

Question 17

An S corporation recognizes a gain on any distribution of ____________________ property.

Accepted Answer

The answer of An S corporation recognizes a gain on...

Question 18

A corporation that does not yet exist ________________ make an S Corporation election.

Accepted Answer

The answer of A corporation that does not yet exist...

Question 19

An S corporation must possess the following characteristics.

Accepted Answer

A) No more than one class of stock. 
B) Corporation organized in the U.S. 
C) Only one class of stock. 
D) All of the above are required of an S corporation. 
E) None of the above is required of an S corporation. 
A) No more than one class of stock. 
B) Corporation organized in the U.S. 
C) Only one class of stock. 
D) All of the above are required of an S corporation. 
E) None of the above is required of an S corporation.

Question 20

Depletion in excess of basis in the property will cause an upward adjustment to an S shareholder's basis.

Accepted Answer

A) True 
 B)False

Depletion in excess of basis in property causes a(n)____________ adjustment to an S shareholder's basis.

Persons who were shareholders during any part of the year before the election date,but were not shareholders when the elction was made,also must consent to the election.

Distributions of appreciated property by an S corporation are not taxable to the entity.

Which could constitute a second class of stock?

All tax preference items flow through the S corporation,to be included in the shareholders' AMT calculations.

If any entity electing S status is currently a C corporation,NOL carryovers from prior years ________________ be used in an S corporation year.

When an S corporation liquidates,which of its tax attributes disappear?

An item that appears in the "Other Adjustments Account" affects basis,but not AAA,such as tax-exempt life insurance proceeds.

Which,if any,of the following can be eligible shareholders of an S corporation?

The benefits of the AAA can be from one shareholder to another _____.

The _ and limitations apply to losses generated by an S Corporation.

The S corporation is entitled to a deduction for its NOL carryovers.

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

The § 1374 tax is a shareholder-level tax on any built-in gain recognized when an S corporation disposes of an asset in a taxable disposition within 10 calendar years after the latest date on which the S election took effect.

An S corporation recognizes a gain on any distribution of ____________________ property.

A corporation that does not yet exist ________________ make an S Corporation election.

An S corporation must possess the following characteristics.

Depletion in excess of basis in the property will cause an upward adjustment to an S shareholder's basis.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, operation, and Basis

Partnerships: Distributions, transfer of Interests, and Terminations

Comparative Forms of Doing Business

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 12: S Corporations

Depletion in excess of basis in property causes a(n)____________ adjustment to an S shareholder's basis.

Persons who were shareholders during any part of the year before the election date,but were not shareholders when the elction was made,also must consent to the election.

Distributions of appreciated property by an S corporation are not taxable to the entity.

Which could constitute a second class of stock?

All tax preference items flow through the S corporation,to be included in the shareholders' AMT calculations.

If any entity electing S status is currently a C corporation,NOL carryovers from prior years ________________ be used in an S corporation year.

When an S corporation liquidates,which of its tax attributes disappear?

An item that appears in the "Other Adjustments Account" affects basis,but not AAA,such as tax-exempt life insurance proceeds.

Which,if any,of the following can be eligible shareholders of an S corporation?

The benefits of the AAA can be ____________________ from one shareholder to another _________________________.

The _______________ and ______________ limitations apply to losses generated by an S Corporation.

The S corporation is entitled to a deduction for its NOL carryovers.

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

The § 1374 tax is a shareholder-level tax on any built-in gain recognized when an S corporation disposes of an asset in a taxable disposition within 10 calendar years after the latest date on which the S election took effect.

An S corporation recognizes a gain on any distribution of ____________________ property.

A corporation that does not yet exist ________________ make an S Corporation election.

An S corporation must possess the following characteristics.

Depletion in excess of basis in the property will cause an upward adjustment to an S shareholder's basis.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, operation, and Basis

Partnerships: Distributions, transfer of Interests, and Terminations

Comparative Forms of Doing Business

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

The benefits of the AAA can be from one shareholder to another _____.

The _ and limitations apply to losses generated by an S Corporation.