Exam 12: S: Corporations

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):

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

The § 1374 tax is a corporate-level tax on any built-in gain recognized in 2012 when an S corporation disposes of an asset in a taxable disposition within 10 tax years after the date on which the S election took effect.

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

Yates Corporation elects S status,effective for calendar year 2012.Yates' only asset has a basis of $50,200 and a fair market value of $110,400 as of January 1,2012.The asset is sold at the end of 2012 for $130,800.What amount must Mark Farris,a 60% owner and subject to a 15% income tax rate,pay,if any?

An S corporation may be subject to the following tax.

Discuss the two methods of allocating tax-related items to S corporation shareholders.

An S corporation that has total assets of at least $7.5 million on Schedule L at the end of the tax year must file a Schedule M-3.

Realized gain is recognized by an S corporation on its distribution of ____________________ property.

You are given the following facts about a one-shareholder S corporation.Prepare the shareholder's ending stock basis.

Tax-exempt income is not separately stated on Schedule K of Form 1120S.

Beginning in 2012,Ewing,Inc. ,an S corporation,holds a AAA balance of $695,100.During the year,the following items occur. Ewing's ending AAA balance is:

How may an S corporation manage its liability for the built-in gains tax?

Which,if any,of the following items has no effect on the stock basis of an S corporation shareholder?

____________________ debt in an S corporation year is not treated as a second class of stock and does not disqualify the S election.

Ryan is the sole shareholder of Sweetwater Apartments,an S corporation in Sour Lake,Texas.At a time when his stock basis is $10,000,the corporation distributes appreciated property worth $100,000 (basis of $10,000).There is no built-in gain.Ryan's taxable gain is:

The § 1202 exclusion of _________________ on the disposition of small business stock (is/is not)_________________ available for S stock.

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

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?

An S corporation can claim a deduction for its NOL carryovers.