Question 1

Distributions of appreciated property by an S corporation are not taxable to the entity.

Accepted Answer

A) True 
 B)False

Question 2

The passive investment income of an S corporation includes net capital gains from the sale of stocks and securities.

Accepted Answer

A) True 
 B)False

Question 3

​A corporation may alternate between S corporation and C corporation status each year,depending on which results in more tax savings.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

majority,v

Question 5

Only 51% of the shareholders must consent to an S election.

Accepted Answer

A) True 
 B)False

Question 6

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. 
B) Ordinary income of $103,000 and long-term capital gain of $6,000. 
C) Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss. 
D) Ordinary income of $109,000. 
A) Ordinary income of $103,000. 
B) Ordinary income of $103,000 and long-term capital gain of $6,000. 
C) Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss. 
D) Ordinary income of $109,000.

Question 7

A per-day,per-share allocation of flow-through S corporation items must be used,unless the shareholder disposes of the entire interest in the entity.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

The answer of The § 1202 exclusion of _________________ on...

Question 9

A two-or-more member ____________________ operates under ____________________ tax principles.

Accepted Answer

The answer of A two-or-more member ____________________ operates under ____________________...

Question 10

Which statement is incorrect with respect to filing an S election?

Accepted Answer

A) Form 2553 must be filed. 
B) All shareholders must consent. 
C) The election may be filed in the previous year. 
D) An extension of time is available for filing Form 2553. 
E) None of the above is incorrect. 
A) Form 2553 must be filed. 
B) All shareholders must consent. 
C) The election may be filed in the previous year. 
D) An extension of time is available for filing Form 2553. 
E) None of the above is incorrect.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Voting common stock and voting preferred stock (with a preference on dividends) would be treated as ____________________ class(es) of stock.

Accepted Answer

The answer of Voting common stock and voting preferred stock...

Question 13

Depreciation recapture income is a ____________________ computed amount.

Accepted Answer

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

Question 14

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

Accepted Answer

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

Question 15

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

Accepted Answer

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

Question 16

The choice of a flow-through entity for a closely-held corporation often is between a(n) ____________________ (a Federal tax entity) and a(n) ____________________ (a state tax entity).

Accepted Answer

S corporat

Question 17

Alomar,a cash basis S corporation in Orlando,Florida,holds the following assets and liabilities on January 1,2016,the date the S election is made.
​
   
During the year,Alomar collects the accounts receivable and pays the accounts payable.The land is sold for $3 million,and the taxable income for the year is $590,000.Calculate any built-in gains tax.

Accepted Answer

$206,500.The net unrealized built-in gai

Question 18

If an S corporation's beginning balance in OAA is zero,and the following transactions occur,what is the ending OAA balance?
​

Accepted Answer

A) $1,300 
B) $7,600 
C) $23,300 
D) $27,500 
E) None of the above 
A) $1,300 
B) $7,600 
C) $23,300 
D) $27,500 
E) None of the above

Question 19

Several individuals acquire assets on behalf of Skip Corporation on May 28,purchased assets on June 3 and began business on June 11.They subscribe to shares of stock,file articles of incorporation for Skip,and become shareholders on June 21.The S election must be filed no later than 2 1/2 months after:

Accepted Answer

A) May 28. 
B) June 3. 
C) June 11. 
D) June 21. 
E) December 31. 
A) May 28. 
B) June 3. 
C) June 11. 
D) June 21. 
E) December 31.

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

Exam 22: S Corporations

Distributions of appreciated property by an S corporation are not taxable to the entity.

The passive investment income of an S corporation includes net capital gains from the sale of stocks and securities.

​A corporation may alternate between S corporation and C corporation status each year,depending on which results in more tax savings.

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

Only 51% of the shareholders must consent to an S election.

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:

A per-day,per-share allocation of flow-through S corporation items must be used,unless the shareholder disposes of the entire interest in the entity.

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

A two-or-more member ____________________ operates under ____________________ tax principles.

Which statement is incorrect with respect to filing an S election?

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

Voting common stock and voting preferred stock (with a preference on dividends) would be treated as ____________________ class(es) of stock.

Depreciation recapture income is a ____________________ computed amount.

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

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

The choice of a flow-through entity for a closely-held corporation often is between a(n) ____________________ (a Federal tax entity) and a(n) ____________________ (a state tax entity).

If an S corporation's beginning balance in OAA is zero,and the following transactions occur,what is the ending OAA balance? ​

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.

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

Property Transactions: Determination of Gain or Loss, basis Considerations, and Nontaxable Exchanges

Property Transactions, capital Gains and Losses, sec1231, and 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 Reorganization

Partnerships

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters

A corporation may alternate between S corporation and C corporation status each year,depending on which results in more tax savings.

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

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:

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

A two-or-more member operates under tax principles.

The choice of a flow-through entity for a closely-held corporation often is between a(n) (a Federal tax entity) and a(n) (a state tax entity).

If an S corporation's beginning balance in OAA is zero,and the following transactions occur,what is the ending OAA balance?