Question 1

A(n) ____________________ alien cannot own stock in an S corporation.

Accepted Answer

The answer of A(n) ____________________ alien cannot own stock in...

Question 2

The alternative minimum tax may apply to an S corporation.

Accepted Answer

A) True 
 B)False

Question 3

The maximum number of S shareholders is:

Accepted Answer

A)  75. 
B)  100. 
C)  200. 
D)  Some other fixed amount. 
E)  Indeterminable. 
A)  75. 
B)  100. 
C)  200. 
D)  Some other fixed amount. 
E)  Indeterminable.

Question 4

An S corporation can take advantage of the dividends received deduction.

Accepted Answer

A) True 
 B)False

Question 5

Pepper, Inc., an S corporation in Norfolk, Virginia, has revenues of $400,000, taxable interest of $380,000, operating expenses of $250,000, and deductions attributable to the interest income of $140,000. What is Pepper's passive income penalty tax payable, if any?

Accepted Answer

A)  $0. 
B)  $40,895. 
C)  $185,000. 
D)  $380,000. 
E)  Some other amount. 
A)  $0. 
B)  $40,895. 
C)  $185,000. 
D)  $380,000. 
E)  Some other amount.

Question 6

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, $70,000 of these receivables are collected. Calculate any built-in gains tax, assuming that there is sufficient taxable income.

Accepted Answer

A)  $0. 
B)  $10,500. 
C)  $24,500. 
D)  $35,000. 
E)  Some other amount. 
A)  $0. 
B)  $10,500. 
C)  $24,500. 
D)  $35,000. 
E)  Some other amount.

Question 7

Yates Corporation elects S status, effective for calendar year 2011. Yates' only asset has a basis of $50,200 and a fair market value of $110,400 as of January 1, 2011. The asset is sold at the end of 2011 for $130,800. What amount must Mark Farris, a 60% owner and subject to a 15% income tax rate, pay, if any?

Accepted Answer

A)  $5,358. 
B)  $12,642. 
C)  $21,070. 
D)  $35,718. 
E)  None of the above. 
A)  $5,358. 
B)  $12,642. 
C)  $21,070. 
D)  $35,718. 
E)  None of the above.

Question 8

Depreciation recapture income is a Schedule K item.

Accepted Answer

A) True 
 B)False

Question 9

The Section 179 expense deduction is a Schedule K item.

Accepted Answer

A) True 
 B)False

Question 10

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.

Accepted Answer

A) True 
 B)False

Question 11

An S corporation is limited to ____________________ (how many?) shareholders.

Accepted Answer

The answer of An S corporation is limited to ____________________...

Question 12

Match the term with the proper response. There may be more than one responses for each term.

Accepted Answer

The answer of Match the term with the proper response....

Question 13

Which could constitute a second class of stock under the S corporation rules?

Accepted Answer

A)  Unissued stock. 
B)  Treasury stock. 
C)  Stock appreciation rights. 
D)  Convertible debentures. 
E)  None of the above. 
A)  Unissued stock. 
B)  Treasury stock. 
C)  Stock appreciation rights. 
D)  Convertible debentures. 
E)  None of the above.

Question 14

Beginning in 2011, the AAA of Ewing, Inc., an S corporation, has a balance of $725,000. During the year, the following items occur.   Ewing's ending AAA balance is:

Accepted Answer

A)  $1,153,150. 
B)  $1,134,150. 
C)  $1,127,650. 
D)  $1,126,750. 
A)  $1,153,150. 
B)  $1,134,150. 
C)  $1,127,650. 
D)  $1,126,750.

Question 15

An S corporation may have ____________________ class(es) of stock.

Accepted Answer

The answer of An S corporation may have ____________________ class(es)...

Question 16

Explain how the domestic production activities deduction is used for an S corporation.

Accepted Answer

The § 199 deduction is determined at the

Question 17

It is beneficial for an S corporation to issue § 1244 stock.

Accepted Answer

A) True 
 B)False

Question 18

An S corporation must own ____________________% of a subsidiary's stock in order to elect to treat the subsidiary as a QSSS.

Accepted Answer

The answer of An S corporation must own ____________________% of...

Question 19

An S corporation in Lawrence, Kansas has a recognized built-in gain of $110,000 and taxable income of $98,000. The company has an $8,000 NOL carryforward from a C corporation year, and a $7,000 business credit carryforward from a C corporation year. The built-in gains tax liability is:

Accepted Answer

A)  $0. 
B)  $24,500. 
C)  $28,700. 
D)  $31,500. 
E)  None of the above. 
A)  $0. 
B)  $24,500. 
C)  $28,700. 
D)  $31,500. 
E)  None of the above.

Question 20

S corporation status avoids the ____________________ taxation and ____________________ limitations inherent in the regular corporate form.
or

Accepted Answer

The answer of S corporation status avoids the ____________________ taxation...

A(n) ____________________ alien cannot own stock in an S corporation.

The alternative minimum tax may apply to an S corporation.

The maximum number of S shareholders is:

An S corporation can take advantage of the dividends received deduction.

Pepper, Inc., an S corporation in Norfolk, Virginia, has revenues of $400,000, taxable interest of $380,000, operating expenses of $250,000, and deductions attributable to the interest income of $140,000. What is Pepper's passive income penalty tax payable, if any?

Depreciation recapture income is a Schedule K item.

The Section 179 expense deduction is a Schedule K item.

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.

An S corporation is limited to ____________________ (how many?) shareholders.

Match the term with the proper response. There may be more than one responses for each term.

Which could constitute a second class of stock under the S corporation rules?

Beginning in 2011, the AAA of Ewing, Inc., an S corporation, has a balance of $725,000. During the year, the following items occur. Ewing's ending AAA balance is:

An S corporation may have ____________________ class(es) of stock.

Explain how the domestic production activities deduction is used for an S corporation.

It is beneficial for an S corporation to issue § 1244 stock.

An S corporation must own ____________________% of a subsidiary's stock in order to elect to treat the subsidiary as a QSSS.

An S corporation in Lawrence, Kansas has a recognized built-in gain of $110,000 and taxable income of $98,000. The company has an $8,000 NOL carryforward from a C corporation year, and a $7,000 business credit carryforward from a C corporation year. The built-in gains tax liability is:

S corporation status avoids the taxation and limitations inherent in the regular corporate form. or

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

A(n) ____________________ alien cannot own stock in an S corporation.

The alternative minimum tax may apply to an S corporation.

The maximum number of S shareholders is:

An S corporation can take advantage of the dividends received deduction.

Pepper, Inc., an S corporation in Norfolk, Virginia, has revenues of $400,000, taxable interest of $380,000, operating expenses of $250,000, and deductions attributable to the interest income of $140,000. What is Pepper's passive income penalty tax payable, if any?

Depreciation recapture income is a Schedule K item.

The Section 179 expense deduction is a Schedule K item.

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.

An S corporation is limited to ____________________ (how many?) shareholders.

Match the term with the proper response. There may be more than one responses for each term.

Which could constitute a second class of stock under the S corporation rules?

Beginning in 2011, the AAA of Ewing, Inc., an S corporation, has a balance of $725,000. During the year, the following items occur. Ewing's ending AAA balance is:

An S corporation may have ____________________ class(es) of stock.

Explain how the domestic production activities deduction is used for an S corporation.

It is beneficial for an S corporation to issue § 1244 stock.

An S corporation must own ____________________% of a subsidiary's stock in order to elect to treat the subsidiary as a QSSS.

An S corporation in Lawrence, Kansas has a recognized built-in gain of $110,000 and taxable income of $98,000. The company has an $8,000 NOL carryforward from a C corporation year, and a $7,000 business credit carryforward from a C corporation year. The built-in gains tax liability is:

S corporation status avoids the ____________________ taxation and ____________________ limitations inherent in the regular corporate form. or

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

S corporation status avoids the taxation and limitations inherent in the regular corporate form. or