Question 1

Shareholders owning a(n) of shares (voting and nonvoting) may
____________________ revoke an election.

Accepted Answer

majority,

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

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

Question 4

Which tax provision does not apply to an S corporation?

Accepted Answer

A)  DPAD. 
B)  Section 1244 stock. 
C)  Penalty for failure to file. 
D)  10% charitable contribution limitation. 
E)  Estimated tax payments. 
A)  DPAD. 
B)  Section 1244 stock. 
C)  Penalty for failure to file. 
D)  10% charitable contribution limitation. 
E)  Estimated tax payments.

Question 5

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 6

For a new corporation, a premature S election may not be effective.

Accepted Answer

A) True 
 B)False

Question 7

Pass­through S corporation losses can reduce the basis in the shareholder's loan to the entity, but distributions do not reduce loan basis.

Accepted Answer

A) True 
 B)False

Question 8

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

-OAA

Accepted Answer

A) 	Gross receipts from royalties, passive rents, dividends, interest, etc. 
B) 	Penalty tax to stop an S corporation from avoiding the corporate tax on disposition of appreciated property. 
C) 	Cumulative total of undistributed non-separately and separately stated items. 
D) 	Tax-free distribution. 
E) 	Taxed as dividend income. 
A) 	Gross receipts from royalties, passive rents, dividends, interest, etc. 
B) 	Penalty tax to stop an S corporation from avoiding the corporate tax on disposition of appreciated property. 
C) 	Cumulative total of undistributed non-separately and separately stated items. 
D) 	Tax-free distribution. 
E) 	Taxed as dividend income.

Question 9

Grams, Inc., a calendar year S corporation is a manufacturer of widgets. Grams reports $20,000 DPGR and $15,000 of wages; its S corporation's QPAI is $5,000. Janet owns 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?

Accepted Answer

A)  None. 
B)  $2,000 and $6,000. 
C)  $5,000 and $15,000. 
D)  $5,000 and $20,000. 
A)  None. 
B)  $2,000 and $6,000. 
C)  $5,000 and $15,000. 
D)  $5,000 and $20,000.

Question 10

Gene Grams is a 45% owner of a calendar year S corporation during 2014. His beginning stock basis is $230,000, and the S corporation reports the following items.

Accepted Answer

Beginning stock basis $230,000

Question 11

An S corporation cannot be a shareholder in another corporation.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

The answer of An S corporation's LIFO recapture amount equals...

Question 13

An S corporation cannot incur a tax liability at the corporation level.

Accepted Answer

A) True 
 B)False

Question 14

Which statement is incorrect?

Accepted Answer

A)  S corporations are treated as corporations under state law. 
B)  S corporations are treated as partnerships for Federal income tax purposes. 
C)  Distributions of appreciated property are taxable to the S corporation. 
D)  None of the above statements is incorrect. 
A)  S corporations are treated as corporations under state law. 
B)  S corporations are treated as partnerships for Federal income tax purposes. 
C)  Distributions of appreciated property are taxable to the S corporation. 
D)  None of the above statements is incorrect.

Question 15

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

Accepted Answer

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

Question 16

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 17

An S corporation reports a recognized built-in gain of $110,000 and taxable income of $98,000. The company carries 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)  $31,500. 
B)  $28,700. 
C)  $24,500. 
D)  $0. 
E)  Some other amount. 
A)  $31,500. 
B)  $28,700. 
C)  $24,500. 
D)  $0. 
E)  Some other amount.

Question 18

Some taxation rules apply to an S corporation.

Accepted Answer

partnershi

Question 19

Distribution of loss property by an S corporation to a shareholder generally should be .

Accepted Answer

The answer of Distribution of loss property by an S...

Question 20

An S shareholder who dies during the S corporation tax year must report his or her share of the pro rata income (loss) items up to the date of death, on the final individual tax return.

Accepted Answer

A) True 
 B)False

Shareholders owning a(n) of shares (voting and nonvoting) may ____________________ revoke an election.

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

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

Which tax provision does not apply to an S corporation?

For a new corporation, a premature S election may not be effective.

Passthrough S corporation losses can reduce the basis in the shareholder's loan to the entity, but distributions do not reduce loan basis.

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

Gene Grams is a 45% owner of a calendar year S corporation during 2014. His beginning stock basis is $230,000, and the S corporation reports the following items.

An S corporation cannot be a shareholder in another corporation.

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

An S corporation cannot incur a tax liability at the corporation level.

Which statement is incorrect?

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

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 reports a recognized built-in gain of $110,000 and taxable income of $98,000. The company carries 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:

Some taxation rules apply to an S corporation.

Distribution of loss property by an S corporation to a shareholder generally should be .

An S shareholder who dies during the S corporation tax year must report his or her share of the pro rata income (loss) items up to the date of death, on the final individual tax return.

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

Shareholders owning a(n) of shares (voting and nonvoting) may ____________________ revoke an election.

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

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

Which tax provision does not apply to an S corporation?

For a new corporation, a premature S election may not be effective.

Pass­through S corporation losses can reduce the basis in the shareholder's loan to the entity, but distributions do not reduce loan basis.

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

Gene Grams is a 45% owner of a calendar year S corporation during 2014. His beginning stock basis is $230,000, and the S corporation reports the following items.

An S corporation cannot be a shareholder in another corporation.

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

An S corporation cannot incur a tax liability at the corporation level.

Which statement is incorrect?

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

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 reports a recognized built-in gain of $110,000 and taxable income of $98,000. The company carries 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:

Some taxation rules apply to an S corporation.

Distribution of loss property by an S corporation to a shareholder generally should be .

An S shareholder who dies during the S corporation tax year must report his or her share of the pro rata income (loss) items up to the date of death, on the final individual tax return.

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

Passthrough S corporation losses can reduce the basis in the shareholder's loan to the entity, but distributions do not reduce loan basis.

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