Exam 12: S: Corporations

Grams, Inc., a calendar year S corporation, reports $20,000 DPGR and $15,000 of wages, and the S corporation's QPAI is $5,000. Janet has a 40% interest in the S corporation. All expenses that reduce DPGR are from wages, and all wages paid relate to DPGR. How much QPAI and wages are allocated to Janet?

Several individuals acquire assets on behalf of Skip Corporation on May 28, 2011, purchased assets on June 3, 2011, and begin doing business on June 11, 2011. They subscribe to shares of stock, file articles of incorporation for Skip, and become shareholders on June 21, 2011. The S election must be filed no later than 2 1/2 months after:

With respect to passive losses, there are three classes of income, losses, and credits: ____________________, ____________________, and passive. or

Which is ineligible to be an S shareholder?

A corporation can revoke its S status prospectively.

Tax-exempt income is listed on Schedule ____________________ of Form 1120S.

During 2011, Dana Rippel, the sole shareholder of a calendar year S corporation, received a distribution of $16,000. On December 31, 2010, her stock basis was $4,000. The corporation earned $11,000 ordinary income during the year. It has no accumulated E & P. Which statement is correct?

The amount of any distribution to an S corporation shareholder is equal to the ____________________ plus the fair market value of any other property distributed..

An S corporation's LIFO recapture amount equals the excess of the inventory's value under ____________________ over the ____________________ value.

Any distribution made by an S corporation during a tax year is taken into account before accounting for the year's losses.

What method is automatically used to allocate income or losses (unless an election is made)?

What are the characteristics of an S corporation's straight debt?

Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2?

The carryover period for the NOLs of a C corporation continues to run during S corporation years.

An S corporation's separately stated items are identical to those separately stated by partnerships.

Passive investment income includes net capital gains from the sale of stocks and securities.

An S corporation shareholder's basis includes his or her direct investments plus a ratable share of any corporate liabilities.

A distribution from OAA is taxable.

An S shareholder's stock basis is reduced by flow-through losses before accounting for distributions.

An NOL from a Subchapter C year can be used to offset operating income in an S corporation year.