Question 1

Which tax provision does not apply to an S corporation?

Accepted Answer

A)  Hobby loss rule. 
B)  Section 1244 stock. 
C)  Penalty for failure to file. 
D)  10% charitable contribution limitation. 
E)  Estimated tax payments. 
A)  Hobby loss rule. 
B)  Section 1244 stock. 
C)  Penalty for failure to file. 
D)  10% charitable contribution limitation. 
E)  Estimated tax payments. D

Question 2

Non-separately computed loss ____________________ a S shareholder's stock basis.

Accepted Answer

reduces

Question 3

Gene Grams is a 45% owner of a calendar year S corporation during 2011. His beginning stock basis is $230,000, and the S corporation reports the following items.

Accepted Answer

Calculate Grams' stock basis at year-end.

Question 4

Consent to an S election must be in ____________________, and it must be generally filed by the election ____________________.
or

Accepted Answer

The answer of Consent to an S election must be...

Question 5

List some of the separately stated items listed on Schedule K of the Form 1120S.

Accepted Answer

The answer of List some of the separately stated items...

Question 6

On January 2, 2010, Tim loans his S corporation $10,000. By the end of 2010, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000. During 2011, the company's operating income is $10,000. The company also makes distributions to Tim of $8,000. Which statement is correct?

Accepted Answer

A)  Loan basis is now $10,000. 
B)  $8,000 LTCG. 
C)  Stock basis is $2,000. 
D)  $2,000 LTCG. 
E)  None of the above statements is correct. 
A)  Loan basis is now $10,000. 
B)  $8,000 LTCG. 
C)  Stock basis is $2,000. 
D)  $2,000 LTCG. 
E)  None of the above statements is correct.

Question 7

Tax-exempt income is not separately stated on Schedule K of Form 1120S.

Accepted Answer

A) True 
 B)False

Question 8

An S shareholder's basis is decreased by distributions treated as being paid from AAA.

Accepted Answer

A) True 
 B)False

Question 9

For Federal income tax purposes, taxation of S corporations resembles that of a(n) ____________________.

Accepted Answer

The answer of For Federal income tax purposes, taxation of...

Question 10

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?

Accepted Answer

A)  $0. 
B)  $13,562. 
C)  $16,438. 
D)  $32,877. 
E)  None of the above. 
A)  $0. 
B)  $13,562. 
C)  $16,438. 
D)  $32,877. 
E)  None of the above.

Question 11

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

Accepted Answer

A)  Intangible drilling costs. 
B)  Foreign loss. 
C)  Recovery of a tax benefit. 
D)  Interest expense. 
E)  All of the above appear on Schedule K. 
A)  Intangible drilling costs. 
B)  Foreign loss. 
C)  Recovery of a tax benefit. 
D)  Interest expense. 
E)  All of the above appear on Schedule K.

Question 12

Voting common stock and voting preferred stock (with a preference on dividends) would be treated as ____________________ class(es) of stock.

Accepted Answer

The answer of Voting common stock and voting preferred stock...

Question 13

Pass-through S corporation losses can reduce the basis in the shareholder's loan to the entity, but distributions do not.

Accepted Answer

A) True 
 B)False

Question 14

An S shareholder's stock basis includes a ratable share of any S corporation liabilities.

Accepted Answer

A) True 
 B)False

Question 15

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.

Accepted Answer

A) True 
 B)False

Question 16

Which of these tax provisions does not apply to an S corporation?

Accepted Answer

A)  Section 1244 stock. 
B)  "Partial liquidation" stock redemption. 
C)  Tax-free "A" reorganization. 
D)  Section 1202 capital gain exclusion. 
A)  Section 1244 stock. 
B)  "Partial liquidation" stock redemption. 
C)  Tax-free "A" reorganization. 
D)  Section 1202 capital gain exclusion.

Question 17

Bidden, Inc., a calendar year S corporation, incurred the following items.
   Calculate Bidden's nonseparately computed income.

Accepted Answer

The answer of Bidden, Inc., a calendar year S corporation,...

Question 18

Realized gain is ____________________ by an S corporation on its distribution of appreciated property.

Accepted Answer

The answer of Realized gain is ____________________ by an S...

Question 19

A former spouse is treated as being in the same family as the individual to whom he or she was married.

Accepted Answer

A) True 
 B)False

Question 20

You are a 60% owner of an S corporation. Calculate your ending stock basis, based upon these facts.

Accepted Answer

$42,570 + $15,000 +.

Which tax provision does not apply to an S corporation?

Non-separately computed loss ____________________ a S shareholder's stock basis.

Gene Grams is a 45% owner of a calendar year S corporation during 2011. His beginning stock basis is $230,000, and the S corporation reports the following items.

Consent to an S election must be in , and it must be generally filed by the election . or

List some of the separately stated items listed on Schedule K of the Form 1120S.

On January 2, 2010, Tim loans his S corporation $10,000. By the end of 2010, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000. During 2011, the company's operating income is $10,000. The company also makes distributions to Tim of $8,000. Which statement is correct?

Tax-exempt income is not separately stated on Schedule K of Form 1120S.

An S shareholder's basis is decreased by distributions treated as being paid from AAA.

For Federal income tax purposes, taxation of S corporations resembles that of a(n) ____________________.

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

Voting common stock and voting preferred stock (with a preference on dividends) would be treated as ____________________ class(es) of stock.

Pass-through S corporation losses can reduce the basis in the shareholder's loan to the entity, but distributions do not.

An S shareholder's stock basis includes a ratable share of any S corporation liabilities.

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.

Which of these tax provisions does not apply to an S corporation?

Bidden, Inc., a calendar year S corporation, incurred the following items. Calculate Bidden's nonseparately computed income.

Realized gain is ____________________ by an S corporation on its distribution of appreciated property.

A former spouse is treated as being in the same family as the individual to whom he or she was married.

You are a 60% owner of an S corporation. Calculate your ending stock basis, based upon these facts.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings 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

Taxes on the Financial Statements

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

Which tax provision does not apply to an S corporation?

Non-separately computed loss ____________________ a S shareholder's stock basis.

Gene Grams is a 45% owner of a calendar year S corporation during 2011. His beginning stock basis is $230,000, and the S corporation reports the following items.

Consent to an S election must be in ____________________, and it must be generally filed by the election ____________________. or

List some of the separately stated items listed on Schedule K of the Form 1120S.

On January 2, 2010, Tim loans his S corporation $10,000. By the end of 2010, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000. During 2011, the company's operating income is $10,000. The company also makes distributions to Tim of $8,000. Which statement is correct?

Tax-exempt income is not separately stated on Schedule K of Form 1120S.

An S shareholder's basis is decreased by distributions treated as being paid from AAA.

For Federal income tax purposes, taxation of S corporations resembles that of a(n) ____________________.

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

Voting common stock and voting preferred stock (with a preference on dividends) would be treated as ____________________ class(es) of stock.

Pass-through S corporation losses can reduce the basis in the shareholder's loan to the entity, but distributions do not.

An S shareholder's stock basis includes a ratable share of any S corporation liabilities.

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.

Which of these tax provisions does not apply to an S corporation?

Bidden, Inc., a calendar year S corporation, incurred the following items. Calculate Bidden's nonseparately computed income.

Realized gain is ____________________ by an S corporation on its distribution of appreciated property.

A former spouse is treated as being in the same family as the individual to whom he or she was married.

You are a 60% owner of an S corporation. Calculate your ending stock basis, based upon these facts.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings 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

Taxes on the Financial Statements

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

Consent to an S election must be in , and it must be generally filed by the election . or