Question 1

Depreciation recapture income is a ____________________ computed amount.

Accepted Answer

The answer of Depreciation recapture income is a ____________________ computed...

Question 2

Discuss the two methods of allocating S items to shareholders.

Accepted Answer

A per-day, per-share method must be used

Question 3

An S corporation with substantial AEP has operating revenues of $410,000, taxable interest income of $390,000, operating expenses of $260,000, and deductions attributable to the interest of $150,000. The passive income penalty tax payable, if any, is:

Accepted Answer

A)  $0. 
B)  $40,923. 
C)  $116,923. 
D)  $136,500. 
E)  None of the above. 
A)  $0. 
B)  $40,923. 
C)  $116,923. 
D)  $136,500. 
E)  None of the above.

Question 4

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

Accepted Answer

A)  Treasury stock. 
B)  Phantom stock. 
C)  Unexercised stock options. 
D)  Warrants. 
E)  None of the above. 
A)  Treasury stock. 
B)  Phantom stock. 
C)  Unexercised stock options. 
D)  Warrants. 
E)  None of the above.

Question 5

Stock basis first is increased by income items, then ____________________ by distributions, and finally decreased by ____________________.

Accepted Answer

The answer of Stock basis first is increased by income...

Question 6

If an S corporation shareholder's basis in a loan to the entity has been reduced, the shareholder recognizes gross income when the S corporation ____________________ the shareholder.

Accepted Answer

The answer of If an S corporation shareholder's basis in...

Question 7

An S shareholder's basis in his or her stock can be reduced below zero.

Accepted Answer

A) True 
 B)False

Question 8

Simmen, Inc., a calendar year S corporation, incurred the following items in 2011.
   Calculate Simmen's nonseparately computed income.

Accepted Answer

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

Question 9

Any distribution of cash or property by a corporation that does not exceed the balance of AAA with respect to the stock during a post-termination transition period of approximately one year is applied against and reduces the adjusted basis of the stock.

Accepted Answer

A) True 
 B)False

Question 10

Tax-exempt income is a Schedule K item for an S corporation.

Accepted Answer

A) True 
 B)False

Question 11

There is no limit on the amount of passive investment income that an S corporation can receive during the year.

Accepted Answer

A) True 
 B)False

Question 12

An S corporation must possess the following characteristic(s):

Accepted Answer

A)  No more than 100 shareholders. 
B)  Corporation organized in the U.S. 
C)  Only one class of stock. 
D)  All of the above are required of S corporations. 
E)  None of the above is required for S corporations. 
A)  No more than 100 shareholders. 
B)  Corporation organized in the U.S. 
C)  Only one class of stock. 
D)  All of the above are required of S corporations. 
E)  None of the above is required for S corporations.

Question 13

An estate can be an S corporation shareholder.

Accepted Answer

A) True 
 B)False

Question 14

You are given the following facts about a 40% owner of an S corporation, and you are asked to prepare her ending stock basis.

Accepted Answer

A)  $77,950. 
B)  $82,750. 
C)  $97,100. 
D)  $103,225. 
E)  Some other answer. 
A)  $77,950. 
B)  $82,750. 
C)  $97,100. 
D)  $103,225. 
E)  Some other answer.

Question 15

Which item has no effect on an S corporation's AAA?

Accepted Answer

A)  Capital loss. 
B)  Administrative expenses. 
C)  Cost of goods sold. 
D)  Stock purchase by a shareholder. 
E)  All of the above modify AAA. 
A)  Capital loss. 
B)  Administrative expenses. 
C)  Cost of goods sold. 
D)  Stock purchase by a shareholder. 
E)  All of the above modify AAA.

Question 16

Rents always are considered to be passive investment income in S status.

Accepted Answer

A) True 
 B)False

Question 17

Which, if any, of the following can be an eligible shareholder of an S corporation?

Accepted Answer

A)  A resident alien. 
B)  Limited liability company. 
C)  A foreign corporation. 
D)  A Roth IRA. 
E)  None of the above can own S corporation stock. 
A)  A resident alien. 
B)  Limited liability company. 
C)  A foreign corporation. 
D)  A Roth IRA. 
E)  None of the above can own S corporation stock.

Question 18

An S corporation recognizes a gain on any distribution of ____________________ property.

Accepted Answer

The answer of An S corporation recognizes a gain on...

Question 19

The Schedule M-3 is the same for a C corporation and an S corporation.

Accepted Answer

A) True 
 B)False

Question 20

S corporation income is taxed at the ____________________ level and not at the ____________________ level.
or

Accepted Answer

shareholde

Depreciation recapture income is a ____________________ computed amount.

Discuss the two methods of allocating S items to shareholders.

An S corporation with substantial AEP has operating revenues of $410,000, taxable interest income of $390,000, operating expenses of $260,000, and deductions attributable to the interest of $150,000. The passive income penalty tax payable, if any, is:

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

Stock basis first is increased by income items, then by distributions, and finally decreased by .

If an S corporation shareholder's basis in a loan to the entity has been reduced, the shareholder recognizes gross income when the S corporation ____________________ the shareholder.

An S shareholder's basis in his or her stock can be reduced below zero.

Simmen, Inc., a calendar year S corporation, incurred the following items in 2011. Calculate Simmen's nonseparately computed income.

Any distribution of cash or property by a corporation that does not exceed the balance of AAA with respect to the stock during a post-termination transition period of approximately one year is applied against and reduces the adjusted basis of the stock.

Tax-exempt income is a Schedule K item for an S corporation.

There is no limit on the amount of passive investment income that an S corporation can receive during the year.

An S corporation must possess the following characteristic(s):

An estate can be an S corporation shareholder.

You are given the following facts about a 40% owner of an S corporation, and you are asked to prepare her ending stock basis.

Which item has no effect on an S corporation's AAA?

Rents always are considered to be passive investment income in S status.

Which, if any, of the following can be an eligible shareholder of an S corporation?

An S corporation recognizes a gain on any distribution of ____________________ property.

The Schedule M-3 is the same for a C corporation and an S corporation.

S corporation income is taxed at the level and not at the level. 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

Depreciation recapture income is a ____________________ computed amount.

Discuss the two methods of allocating S items to shareholders.

An S corporation with substantial AEP has operating revenues of $410,000, taxable interest income of $390,000, operating expenses of $260,000, and deductions attributable to the interest of $150,000. The passive income penalty tax payable, if any, is:

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

Stock basis first is increased by income items, then ____________________ by distributions, and finally decreased by ____________________.

If an S corporation shareholder's basis in a loan to the entity has been reduced, the shareholder recognizes gross income when the S corporation ____________________ the shareholder.

An S shareholder's basis in his or her stock can be reduced below zero.

Simmen, Inc., a calendar year S corporation, incurred the following items in 2011. Calculate Simmen's nonseparately computed income.

Any distribution of cash or property by a corporation that does not exceed the balance of AAA with respect to the stock during a post-termination transition period of approximately one year is applied against and reduces the adjusted basis of the stock.

Tax-exempt income is a Schedule K item for an S corporation.

There is no limit on the amount of passive investment income that an S corporation can receive during the year.

An S corporation must possess the following characteristic(s):

An estate can be an S corporation shareholder.

You are given the following facts about a 40% owner of an S corporation, and you are asked to prepare her ending stock basis.

Which item has no effect on an S corporation's AAA?

Rents always are considered to be passive investment income in S status.

Which, if any, of the following can be an eligible shareholder of an S corporation?

An S corporation recognizes a gain on any distribution of ____________________ property.

The Schedule M-3 is the same for a C corporation and an S corporation.

S corporation income is taxed at the ____________________ level and not at the ____________________ level. 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

Stock basis first is increased by income items, then by distributions, and finally decreased by .

S corporation income is taxed at the level and not at the level. or