Question 1

Straight debt issued in an S corporation year will not be treated as a second class of stock and will not disqualify an S election.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  Tax-exempt interest income. 
B)  Depreciation recapture income. 
C)  Section 179 expense deduction. 
D)  Section 1231 loss. 
E)  All of the above appear on Schedule K. 
A)  Tax-exempt interest income. 
B)  Depreciation recapture income. 
C)  Section 179 expense deduction. 
D)  Section 1231 loss. 
E)  All of the above appear on Schedule K.

Question 3

Explain how family members are treated for purposes of the number of shareholders requirement concerning S corporation status.

Accepted Answer

A small business corporation theoretical

Question 4

Which item does not appear in an S corporation's nonseparately computed income?

Accepted Answer

A)  Net sales. 
B)  Tax-exempt income. 
C)  Cost of goods sold. 
D)  Depreciation recapture. 
E)  All of the above appear. 
A)  Net sales. 
B)  Tax-exempt income. 
C)  Cost of goods sold. 
D)  Depreciation recapture. 
E)  All of the above appear.

Question 5

Depletion in excess of basis in property causes a(n) ____________________ adjustment to an S shareholder's basis.
or

Accepted Answer

The answer of Depletion in excess of basis in property...

Question 6

Which statement is false?

Accepted Answer

A)  S corporation status provides many of the benefits of partnership treatment. 
B)  S corporation shareholders have limited liability. 
C)  Distributions of appreciated assets are not taxable in an S corporation. 
D)  The personal holding company tax does not apply to an S corporation. 
E)  None of the above. 
A)  S corporation status provides many of the benefits of partnership treatment. 
B)  S corporation shareholders have limited liability. 
C)  Distributions of appreciated assets are not taxable in an S corporation. 
D)  The personal holding company tax does not apply to an S corporation. 
E)  None of the above.

Question 7

Separately stated items are listed on Schedule _________________________ of the Form 1120S.

Accepted Answer

The answer of Separately stated items are listed on Schedule...

Question 8

Post-termination distributions by a former S corporation that are charged against ____________________ do not get tax-free treatment.

Accepted Answer

The answer of Post-termination distributions by a former S corporation...

Question 9

An S corporation can be a partner in a partnership.

Accepted Answer

A) True 
 B)False

Question 10

During 2011, Oxen Corporation incurs the following transactions.   Oxen maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder, Megan. As a result, Megan must recognize:

Accepted Answer

A)  Ordinary income of $103,000 and long-term capital gain of $5,000. 
B)  Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss. 
C)  Ordinary income of $108,000. 
D)  None of the above. 
A)  Ordinary income of $103,000 and long-term capital gain of $5,000. 
B)  Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss. 
C)  Ordinary income of $108,000. 
D)  None of the above.

Question 11

Compensation for services rendered to an S corporation is subject to FICA taxes.

Accepted Answer

A) True 
 B)False

Question 12

You are given the following facts about a one-shareholder S corporation, and you are asked to prepare the shareholder's ending stock basis.

Accepted Answer

A)  $168,660. 
B)  $170,800. 
C)  $214,960. 
D)  $263,960. 
A)  $168,660. 
B)  $170,800. 
C)  $214,960. 
D)  $263,960.

Question 13

Which event will not terminate an S election?

Accepted Answer

A)  Receipt of passive income. 
B)  Share of stock given to a nonresident alien. 
C)  Shares of stock given to a corporation. 
D)  A second class of stock issued. 
E)  All of the above terminate an election. 
A)  Receipt of passive income. 
B)  Share of stock given to a nonresident alien. 
C)  Shares of stock given to a corporation. 
D)  A second class of stock issued. 
E)  All of the above terminate an election.

Question 14

All tax preference items flow through the S corporation, to be included in the shareholders' AMT calculations.

Accepted Answer

A) True 
 B)False

Question 15

Distributions of which assets during an S corporation's post-termination period receive favorable income tax treatment?

Accepted Answer

A)  Cash. 
B)  Automobile. 
C)  Real estate. 
D)  Notes receivable. 
E)  All of the above. 
A)  Cash. 
B)  Automobile. 
C)  Real estate. 
D)  Notes receivable. 
E)  All of the above.

Question 16

An item that appears in the "Other Adjustments Account" affects stock basis, but not AAA, such as tax-exempt life insurance proceeds.

Accepted Answer

A) True 
 B)False

Question 17

Which statement is false?

Accepted Answer

A)  S corporations are treated as corporations under state law. 
B)  The alternative minimum tax applies to an S corporation. 
C)  Liabilities affect S shareholders differently than partners. 
D)  S corporations may not allocate income like partnerships. 
E)  None of the above. 
A)  S corporations are treated as corporations under state law. 
B)  The alternative minimum tax applies to an S corporation. 
C)  Liabilities affect S shareholders differently than partners. 
D)  S corporations may not allocate income like partnerships. 
E)  None of the above.

Straight debt issued in an S corporation year will not be treated as a second class of stock and will not disqualify an S election.

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

Explain how family members are treated for purposes of the number of shareholders requirement concerning S corporation status.

Which item does not appear in an S corporation's nonseparately computed income?

Depletion in excess of basis in property causes a(n) ____________________ adjustment to an S shareholder's basis. or

Which statement is false?

Separately stated items are listed on Schedule _________________________ of the Form 1120S.

Post-termination distributions by a former S corporation that are charged against ____________________ do not get tax-free treatment.

An S corporation can be a partner in a partnership.

During 2011, Oxen Corporation incurs the following transactions. Oxen maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder, Megan. As a result, Megan must recognize:

Compensation for services rendered to an S corporation is subject to FICA taxes.

You are given the following facts about a one-shareholder S corporation, and you are asked to prepare the shareholder's ending stock basis.

Which event will not terminate an S election?

All tax preference items flow through the S corporation, to be included in the shareholders' AMT calculations.

Distributions of which assets during an S corporation's post-termination period receive favorable income tax treatment?

An item that appears in the "Other Adjustments Account" affects stock basis, but not AAA, such as tax-exempt life insurance proceeds.

Which statement is false?

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

Straight debt issued in an S corporation year will not be treated as a second class of stock and will not disqualify an S election.

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

Explain how family members are treated for purposes of the number of shareholders requirement concerning S corporation status.

Which item does not appear in an S corporation's nonseparately computed income?

Depletion in excess of basis in property causes a(n) ____________________ adjustment to an S shareholder's basis. or

Which statement is false?

Separately stated items are listed on Schedule _________________________ of the Form 1120S.

Post-termination distributions by a former S corporation that are charged against ____________________ do not get tax-free treatment.

An S corporation can be a partner in a partnership.

During 2011, Oxen Corporation incurs the following transactions. Oxen maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder, Megan. As a result, Megan must recognize:

Compensation for services rendered to an S corporation is subject to FICA taxes.

You are given the following facts about a one-shareholder S corporation, and you are asked to prepare the shareholder's ending stock basis.

Which event will not terminate an S election?

All tax preference items flow through the S corporation, to be included in the shareholders' AMT calculations.

Distributions of which assets during an S corporation's post-termination period receive favorable income tax treatment?

An item that appears in the "Other Adjustments Account" affects stock basis, but not AAA, such as tax-exempt life insurance proceeds.

Which statement is false?

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