Exam 12: S Corporations

Lott Corporation in Macon,Georgia converts to S corporation status in 2008.Lott used the LIFO inventory method in 2007 and had a LIFO inventory of $420,000 (FIFO value of $550,000).How much tax must be added to the 2007 corporate tax liability,assuming that Lott is subject to a 35% tax rate.

(Multiple Choice)

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Question 101

________________ members are counted as one S corporation shareholder.

(Short Answer)

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Question 102

Beginning in 2008,the AAA of Amit,Inc.,an S corporation,has a balance of $782,000.During the year,the following items occur. Amit's ending AAA balance is:

(Multiple Choice)

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Question 103

Edwards,Inc.,an S corporation,distributes a machine to Mary,a majority shareholder.This asset has an adjusted basis of $30,000,but a fair market value of $80,000.Accumulated cost recovery deductions amount to $25,000.Edwards recognizes a gain of:

(Multiple Choice)

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Question 104

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.

(True/False)

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Question 105

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

(True/False)

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Question 106

The termination of an S election occurs on the day after a corporation ceases to be a small business corporation.

(True/False)

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Question 107

Shareholders owning a(n) of shares (voting and nonvoting)may _____ revoke an election.

(Short Answer)

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Question 108

An S corporation is limited to a theoretical maximum of ______________ shareholders.

(Short Answer)

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Question 109

Compare the distribution of property rules for an S corporation with the corresponding partnership rules.

(Essay)

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Question 110

An S corporation recognizes a loss when distributing assets that are worth less than their basis.

(True/False)

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Question 111

A termination occurs on the day that a corporation ____________________ to be an S corporation.

(Short Answer)

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Question 112

An S corporation cannot incur a tax liability at the corporation level.

(True/False)

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Question 113

Most IRAs can own stock in an S corporation.

(True/False)

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Question 114

Several individuals acquire assets on behalf of Skip Corporation on May 29,2008,purchased assets on June 3,and begin doing business on June 11,2008.They subscribe to shares of stock,file articles of incorporation for Skip,and become shareholders on June 21,2008.The S election must be filed no later than 2 1/2 months after:

(Multiple Choice)

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Question 115

An S shareholder who dies during the corporate tax year must report his or her share of the pro rata income (or loss)up to the date of death on the final individual tax return.

(True/False)

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Question 116

Your client is a C corporation that wishes to convert to S status.Advise this corporation with respect to minimizing any § 1374 built-in gains tax.

(Essay)

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(83)

Question 117

A shareholder's basis is decreased by stock purchases.

(True/False)

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(86)

Question 118

Passive investment income includes gains from the sale of securities.

(True/False)

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(85)

Question 119

A capital loss allocated to a shareholder always reduces the accumulated adjustments account.

(True/False)

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Question 120

Showing 101 - 120 of 161

Lott Corporation in Macon,Georgia converts to S corporation status in 2008.Lott used the LIFO inventory method in 2007 and had a LIFO inventory of $420,000 (FIFO value of $550,000).How much tax must be added to the 2007 corporate tax liability,assuming that Lott is subject to a 35% tax rate.

________________ members are counted as one S corporation shareholder.

Beginning in 2008,the AAA of Amit,Inc.,an S corporation,has a balance of $782,000.During the year,the following items occur. Amit's ending AAA balance is:

Edwards,Inc.,an S corporation,distributes a machine to Mary,a majority shareholder.This asset has an adjusted basis of $30,000,but a fair market value of $80,000.Accumulated cost recovery deductions amount to $25,000.Edwards recognizes a gain of:

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.

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

The termination of an S election occurs on the day after a corporation ceases to be a small business corporation.

Shareholders owning a(n) of shares (voting and nonvoting)may _____ revoke an election.

An S corporation is limited to a theoretical maximum of ______________ shareholders.

Compare the distribution of property rules for an S corporation with the corresponding partnership rules.

An S corporation recognizes a loss when distributing assets that are worth less than their basis.

A termination occurs on the day that a corporation ____________________ to be an S corporation.

An S corporation cannot incur a tax liability at the corporation level.

Most IRAs can own stock in an S corporation.

An S shareholder who dies during the corporate tax year must report his or her share of the pro rata income (or loss)up to the date of death on the final individual tax return.

Your client is a C corporation that wishes to convert to S status.Advise this corporation with respect to minimizing any § 1374 built-in gains tax.

A shareholder's basis is decreased by stock purchases.

Passive investment income includes gains from the sale of securities.

A capital loss allocated to a shareholder always reduces the accumulated adjustments account.

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

Lott Corporation in Macon,Georgia converts to S corporation status in 2008.Lott used the LIFO inventory method in 2007 and had a LIFO inventory of $420,000 (FIFO value of $550,000).How much tax must be added to the 2007 corporate tax liability,assuming that Lott is subject to a 35% tax rate.

________________ members are counted as one S corporation shareholder.

Beginning in 2008,the AAA of Amit,Inc.,an S corporation,has a balance of $782,000.During the year,the following items occur. Amit's ending AAA balance is:

Edwards,Inc.,an S corporation,distributes a machine to Mary,a majority shareholder.This asset has an adjusted basis of $30,000,but a fair market value of $80,000.Accumulated cost recovery deductions amount to $25,000.Edwards recognizes a gain of:

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.

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

The termination of an S election occurs on the day after a corporation ceases to be a small business corporation.

Shareholders owning a(n)____________________ of shares (voting and nonvoting)may _________________________ revoke an election.

An S corporation is limited to a theoretical maximum of ______________ shareholders.

Compare the distribution of property rules for an S corporation with the corresponding partnership rules.

An S corporation recognizes a loss when distributing assets that are worth less than their basis.

A termination occurs on the day that a corporation ____________________ to be an S corporation.

An S corporation cannot incur a tax liability at the corporation level.

Most IRAs can own stock in an S corporation.

An S shareholder who dies during the corporate tax year must report his or her share of the pro rata income (or loss)up to the date of death on the final individual tax return.

Your client is a C corporation that wishes to convert to S status.Advise this corporation with respect to minimizing any § 1374 built-in gains tax.

A shareholder's basis is decreased by stock purchases.

Passive investment income includes gains from the sale of securities.

A capital loss allocated to a shareholder always reduces the accumulated adjustments account.

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

Shareholders owning a(n) of shares (voting and nonvoting)may _____ revoke an election.