Exam 22: S Corporations

This year, Jiang, the sole shareholder of a calendar year S corporation, received a distribution of $17,000. On December 31 of the prior year, his stock basis was $3,000. The corporation earned $12,000 ordinary income during the year. It has no accumulated E&P. Which statement is correct? Ignore the 20% QBI deduction.

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

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).

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

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

Most limited liability partnerships can own stock in an S corporation.

Where the S corporation rules are silent, C corporation provisions apply.

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 (ignore 20% QBI deduction):

An S corporation is subject to the following tax(es).

Tax-exempt income at the S corporation level flows through as taxable to the shareholder.

If an S corporation has C corporation E & P and passive investment income in excess of ____________ % of its gross receipts for____________ consecutive taxable years, the S election is terminated at the beginning of the _______________ year.

Which statement is incorrect?

You are given the following facts about a 50% owner of an S corporation. Compute her ending stock basis.

What statement is correct with respect to an S corporation?

An S corporation must possess which of the following characteristics?

Which statement is incorrect with respect to the number-of-shareholders test in filing an S election?

A new S corporation shareholder can revoke the S election unilaterally, if he/she owns how much of the existing S corporation's stock?

There are no advantages for an S corporation to issue § 1244 stock.

A newly formed S corporation does not receive any tax benefit from a C corporation's NOL incurred in its first election tax year.

The exclusion of gain on disposition of small business stock is not available on disposition of S corporation stock.