Question 1

Identify which of the following statements is true.

Accepted Answer

A) Beach Corporation,an S corporation,has gross receipts of $240,000;taxable income of $120,000;passive investment income of $100,000;and expenses directly attributable to the passive investment income of $20,000.The corporation's excess net passive income is $32,000. 
B) The built-in gains tax applicable to S corporations can be avoided if the property is held for ten years. 
C) An S corporation generally will not owe the built-in gains tax if the corporation has never been a C corporation. 
D) All of the above are true. 
A) Beach Corporation,an S corporation,has gross receipts of $240,000;taxable income of $120,000;passive investment income of $100,000;and expenses directly attributable to the passive investment income of $20,000.The corporation's excess net passive income is $32,000. 
B) The built-in gains tax applicable to S corporations can be avoided if the property is held for ten years. 
C) An S corporation generally will not owe the built-in gains tax if the corporation has never been a C corporation. 
D) All of the above are true.

Question 2

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?

Accepted Answer

A) $25,000 
B) $15,000 
C) $6,000 
D) $5,959 
A) $25,000 
B) $15,000 
C) $6,000 
D) $5,959

Question 3

If an S corporation inadvertently terminates its election,the IRS

Accepted Answer

A) may permit the corporation to report as an S corporation even for the period that includes the termination date. 
B) will not permit the corporation to restore its S election until the completion of a five-year waiting period. 
C) will permit restoration of the S election only if the event causing the termination was not within the control of the corporation. 
D) will permit restoration of the S election if a majority of the shareholders consent to the reinstatement. 
A) may permit the corporation to report as an S corporation even for the period that includes the termination date. 
B) will not permit the corporation to restore its S election until the completion of a five-year waiting period. 
C) will permit restoration of the S election only if the event causing the termination was not within the control of the corporation. 
D) will permit restoration of the S election if a majority of the shareholders consent to the reinstatement.

Question 4

Mashburn Corporation is an S corporation that uses a fiscal year ending June 30 as its tax year.When is Mashburn Corporation's income tax return due?

Accepted Answer

A) July 15 
B) September 15 
C) October 15 
D) March 15 of the next year 
A) July 15 
B) September 15 
C) October 15 
D) March 15 of the next year

Question 5

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?

Accepted Answer

$110,000 ×

Question 6

Identify which of the following statements is true.

Accepted Answer

A) An S corporation cannot own any stock of another corporation. 
B) An S corporation cannot own 100% of the stock of another S corporation. 
C) An S corporation that owns all of the stock of a Qualified Subchapter S Subsidiary (QSub)must report all the income,deductions,and losses of the subsidiary on its own tax return. 
D) All of the above are true. 
A) An S corporation cannot own any stock of another corporation. 
B) An S corporation cannot own 100% of the stock of another S corporation. 
C) An S corporation that owns all of the stock of a Qualified Subchapter S Subsidiary (QSub)must report all the income,deductions,and losses of the subsidiary on its own tax return. 
D) All of the above are true.

Question 7

Shanghai Corporation was organized and elected S status in the current year.How much passive investment income can Shanghai earn and retain its S status?

Accepted Answer

A) none 
B) 80% of gross receipts 
C) 50% of gross receipts 
D) no limit 
A) none 
B) 80% of gross receipts 
C) 50% of gross receipts 
D) no limit

Question 8

The S corporation rules were enacted to allow small corporations to enjoy the nontax advantages of the corporate form of business without being subject to the tax disadvantage of double taxation.

Accepted Answer

A) True 
 B)False

Question 9

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?

Accepted Answer

A) 110 
B) 111 
C) 254 
D) 255 
A) 110 
B) 111 
C) 254 
D) 255

Question 10

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?

Accepted Answer

[$50,000 + ($16,000

Question 11

Identify which of the following statements is true.

Accepted Answer

A) A partnership can be an S corporation shareholder. 
B) A nonresident alien can be an S corporation shareholder. 
C) An S corporation can have more than 100 shareholders,since families are treated as a single shareholder. 
D) All of the above are false. 
A) A partnership can be an S corporation shareholder. 
B) A nonresident alien can be an S corporation shareholder. 
C) An S corporation can have more than 100 shareholders,since families are treated as a single shareholder. 
D) All of the above are false.

Question 12

Which of the following corporate tax levies are imposed on an S corporation?

Accepted Answer

A) corporate income tax 
B) corporate alternative minimum tax 
C) accumulated earnings tax 
D) None of these taxes are imposed on an S corporation. 
A) corporate income tax 
B) corporate alternative minimum tax 
C) accumulated earnings tax 
D) None of these taxes are imposed on an S corporation.

Question 13

Rocky Corporation,an S corporation,reports the following results for the current year:   
Rocky's AAA and accumulated E&P balances at the beginning of the year are $80,000 and $50,000,respectively.Rocky makes a $100,000 cash distribution to its sole shareholder on June 1 and a second $100,000 cash distribution on December 1.The shareholder's basis for Rocky stock on January 1 was $120,000.Discuss the tax consequences of these transactions.

Accepted Answer

The basis of the shareholder's stock is

Question 14

Jeff owns 50% of an S corporation's stock with a basis in his stock of $50,000 on January 1.In addition,the S corporation owes Jeff $30,000 on January 1.The debt has a basis of $30,000 and is evidenced by a note.The S corporation reports an ordinary loss of $150,000 for the current year.The next year,it reports ordinary income of $20,000.On January 1 of the third year,the note is repaid.Due to the repayment of the note,Jeff must report what?

Accepted Answer

The answer of Jeff owns 50% of an S corporation's...

Question 15

Identify which of the following statements is true.

Accepted Answer

A) Perry Corporation,an S corporation,receives $10,000 of dividends from a 25%-owned domestic corporation.Perry is allowed an 80% dividends-received deduction with respect to the distribution. 
B) An NOL is incurred by a C corporation in the current tax year.The C corporation makes an S election for the following tax year.The entire C corporation NOL carryover can be passed through to the S corporation's shareholders at the end of the following tax year. 
C) Tax-exempt interest earned by an S corporation is not reported to its shareholders because it is excluded from the shareholders' gross income. 
D) All of the above are false. 
A) Perry Corporation,an S corporation,receives $10,000 of dividends from a 25%-owned domestic corporation.Perry is allowed an 80% dividends-received deduction with respect to the distribution. 
B) An NOL is incurred by a C corporation in the current tax year.The C corporation makes an S election for the following tax year.The entire C corporation NOL carryover can be passed through to the S corporation's shareholders at the end of the following tax year. 
C) Tax-exempt interest earned by an S corporation is not reported to its shareholders because it is excluded from the shareholders' gross income. 
D) All of the above are false.

Question 16

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.

Accepted Answer

@#IMG-DLM& $16,913 =

Question 17

S shareholders are allocated shares of income,gain,loss,deduction,and credit based on their number of shares of stock and period of time for which the stock is held.

Accepted Answer

A) True 
 B)False

Question 18

Even if the termination of an S election is considered to be inadvertent,the election to terminate is irrevocable.

Accepted Answer

A) True 
 B)False

Question 19

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)?

Accepted Answer

He must report $5,00

Question 20

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

Accepted Answer

A) True 
 B)False

Identify which of the following statements is true.

If an S corporation inadvertently terminates its election,the IRS

Mashburn Corporation is an S corporation that uses a fiscal year ending June 30 as its tax year.When is Mashburn Corporation's income tax return due?

Identify which of the following statements is true.

Shanghai Corporation was organized and elected S status in the current year.How much passive investment income can Shanghai earn and retain its S status?

The S corporation rules were enacted to allow small corporations to enjoy the nontax advantages of the corporate form of business without being subject to the tax disadvantage of double taxation.

Identify which of the following statements is true.

Which of the following corporate tax levies are imposed on an S corporation?

Identify which of the following statements is true.

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.

S shareholders are allocated shares of income,gain,loss,deduction,and credit based on their number of shares of stock and period of time for which the stock is held.

Even if the termination of an S election is considered to be inadvertent,the election to terminate is irrevocable.

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

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters

Exam 11: US Corporations

Identify which of the following statements is true.

If an S corporation inadvertently terminates its election,the IRS

Mashburn Corporation is an S corporation that uses a fiscal year ending June 30 as its tax year.When is Mashburn Corporation's income tax return due?

Identify which of the following statements is true.

Shanghai Corporation was organized and elected S status in the current year.How much passive investment income can Shanghai earn and retain its S status?

The S corporation rules were enacted to allow small corporations to enjoy the nontax advantages of the corporate form of business without being subject to the tax disadvantage of double taxation.

Identify which of the following statements is true.

Which of the following corporate tax levies are imposed on an S corporation?

Identify which of the following statements is true.

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.

S shareholders are allocated shares of income,gain,loss,deduction,and credit based on their number of shares of stock and period of time for which the stock is held.

Even if the termination of an S election is considered to be inadvertent,the election to terminate is irrevocable.

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

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters