Question 1

Which statement is incorrect with respect to an S shareholder's consent?

Accepted Answer

A) Both husband and wife must consent if one owns the stock as community property. 
B) An S election requires a consent from all of the S corporation's shareholders. 
C) A consent must be in writing. 
D) None of the above statements is incorrect. 
A) Both husband and wife must consent if one owns the stock as community property. 
B) An S election requires a consent from all of the S corporation's shareholders. 
C) A consent must be in writing. 
D) None of the above statements is incorrect.

Question 2

On January 2,2016,Tim loans his S corporation $10,000.By the end of 2016,Tim's stock basis is zero,and the basis in his note has been reduced to $8,000.During 2017,the company's operating income is $10,000.The company makes 2017 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 3

A calendar year C corporation reports a $41,000 NOL in 2017,but it elects S status for 2018 and generates an NOL of $30,000 in that year.At all times during 2018,the stock of the corporation was owned by the same 10 shareholders,each of whom owned 10% of the stock.Kris,one of the 10 shareholders,holds an S stock basis of $2,300 at the beginning of 2018.How much of the 2018 loss,if any,is deductible by Kris?

Accepted Answer

A) $0 
B) $2,300 
C) $3,000 
D) $7,100 
A) $0 
B) $2,300 
C) $3,000 
D) $7,100

Question 4

NOL carryovers from C years can be used in an S corporation year against ordinary income.

Accepted Answer

A) True 
 B)False

Question 5

The passive investment income of an S corporation includes gains from the sale of securities.

Accepted Answer

A) True 
 B)False

Which statement is incorrect with respect to an S shareholder's consent?

On January 2,2016,Tim loans his S corporation $10,000.By the end of 2016,Tim's stock basis is zero,and the basis in his note has been reduced to $8,000.During 2017,the company's operating income is $10,000.The company makes 2017 distributions to Tim of $8,000.Tim reports a(n):

NOL carryovers from C years can be used in an S corporation year against ordinary income.

The passive investment income of an S corporation includes gains from the sale of securities.

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

Exam 22: S Corporations

Which statement is incorrect with respect to an S shareholder's consent?

On January 2,2016,Tim loans his S corporation $10,000.By the end of 2016,Tim's stock basis is zero,and the basis in his note has been reduced to $8,000.During 2017,the company's operating income is $10,000.The company makes 2017 distributions to Tim of $8,000.Tim reports a(n):

NOL carryovers from C years can be used in an S corporation year against ordinary income.

The passive investment income of an S corporation includes gains from the sale of securities.

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