Question 1

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

Accepted Answer

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

Question 2

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

Accepted Answer

active, po

Question 3

Depreciation recapture income is a ____________________ computed amount.

Accepted Answer

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

Question 4

The corporate ____________________ ____________________ tax is avoided in an S corporation.

Accepted Answer

The answer of The corporate ____________________ ____________________ tax is avoided...

Question 5

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

Accepted Answer

A) A child, age 10. 
B) A resident alien. 
C) A voting trust. 
D) The estate of a deceased shareholder. 
E) All of the above can own S stock. 
A) A child, age 10. 
B) A resident alien. 
C) A voting trust. 
D) The estate of a deceased shareholder. 
E) All of the above can own S stock.

Question 6

Identify a disadvantage of being an S corporation.

Accepted Answer

A) Generally, trusts cannot be shareholders. 
B) Losses flow through to the shareholders. 
C) The AMT on corporations is avoided. 
D) Tax-exempt income flows through to the shareholders. 
E) None of the above is a disadvantage of the S election. 
A) Generally, trusts cannot be shareholders. 
B) Losses flow through to the shareholders. 
C) The AMT on corporations is avoided. 
D) Tax-exempt income flows through to the shareholders. 
E) None of the above is a disadvantage of the S election.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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. 
A) $0. 
B) $13,562. 
C) $16,438. 
D) $32,877.

Question 9

If a resident alien shareholder moves outside the U.S., the S election is terminated.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

The answer of An S corporation's separately stated items generally...

Question 11

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

Accepted Answer

The § 199 deduction is determined at the

Question 12

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 13

On January 2, 2011, Tim loans his S corporation $10,000.By the end of 2011, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000.During 2012, the company's operating income is $10,000.The company also makes distributions to Tim of $8,000.Tim reports a(n):

Accepted Answer

A) $2,000 LTCG. 
B) $8,000 LTCG. 
C) Stock basis of $2,000. 
D) Loan basis of $10,000. 
A) $2,000 LTCG. 
B) $8,000 LTCG. 
C) Stock basis of $2,000. 
D) Loan basis of $10,000.

Question 14

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 15

Charitable contributions are subject to a 10% limitation at the S corporation level.

Accepted Answer

A) True 
 B)False

Question 16

An S election made before becoming a corporation is valid only beginning with the first 22-month tax year.

Accepted Answer

A) True 
 B)False

Question 17

Trent Huynh is a 45% owner of a calendar year S corporation during 2012.His beginning stock basis is $292,000, and the S corporation reports the following items.
   Calculate Huynh's stock basis at year-end.

Accepted Answer

The answer of Trent Huynh is a 45% owner of...

Question 18

Depreciation recapture income is a Schedule K item.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

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

Question 20

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

Accepted Answer

A) Cash. 
B) Investment portfolio. 
C) Real estate. 
D) Notes receivable. 
A) Cash. 
B) Investment portfolio. 
C) Real estate. 
D) Notes receivable.

Exam 22: S: Corporations

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

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

Depreciation recapture income is a ____________________ computed amount.

The corporate ____________________ ____________________ tax is avoided in an S corporation.

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

Identify a disadvantage of being an S corporation.

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

If a resident alien shareholder moves outside the U.S., the S election is terminated.

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

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

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

On January 2, 2011, Tim loans his S corporation $10,000.By the end of 2011, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000.During 2012, the company's operating income is $10,000.The company also makes distributions to Tim of $8,000.Tim reports a(n):

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

Charitable contributions are subject to a 10% limitation at the S corporation level.

An S election made before becoming a corporation is valid only beginning with the first 22-month tax year.

Trent Huynh is a 45% owner of a calendar year S corporation during 2012.His beginning stock basis is $292,000, and the S corporation reports the following items. Calculate Huynh's stock basis at year-end.

Depreciation recapture income is a Schedule K item.

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

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

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

A: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 1

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 2

Property Transactions: Capital Gains and Losses, 1231, Recapture Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

Income Taxation of Trusts and Estates

Filters

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

The corporate tax is avoided in an S corporation.

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