Question 1

Which item has no effect on an S corporation's AAA?

Accepted Answer

A)  Stock purchase by a shareholder. 
B)  Interest expense. 
C)  Cost of goods sold. 
D)  Capital loss. 
E)  All have an effect on AAA. 
A)  Stock purchase by a shareholder. 
B)  Interest expense. 
C)  Cost of goods sold. 
D)  Capital loss. 
E)  All have an effect on AAA.

Question 2

Which item does not appear on Schedule K of Form 1120S?

Accepted Answer

A)  Tax-exempt interest income. 
B)  Section 1231 gain. 
C)  Section 179 depreciation deduction. 
D)  Depreciation recapture income. 
E)  All of the above appear on Schedule K. 
A)  Tax-exempt interest income. 
B)  Section 1231 gain. 
C)  Section 179 depreciation deduction. 
D)  Depreciation recapture income. 
E)  All of the above appear on Schedule K.

Question 3

Non-separately computed loss ______________ (increases, reduces) a S shareholder's stock basis.

Accepted Answer

The answer of Non-separately computed loss ______________ (increases, reduces) a...

Question 4

An S shareholder's stock basis does not include a ratable share of S corporation liabilities.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

AAA can have a negative balance.

Accepted Answer

A) True 
 B)False

Question 7

An S shareholder's stock basis is reduced by flow-through losses before accounting for distributions.

Accepted Answer

A) True 
 B)False

Question 8

As with partnerships, the income, deductions, and tax credits of an S corporation ____________ to the shareholders annually.

Accepted Answer

The answer of As with partnerships, the income, deductions, and...

Question 9

Pepper, Inc., an S corporation, holds a $1 million balance in accumulated E&P. It reports sales revenues of $400,000, taxable interest of $380,000, operating expenses of $250,000, and deductions attributable to the interest income of $140,000. What is Pepper's passive income penalty tax payable, if any?

Accepted Answer

A)  $380,000. 
B)  $116,842. 
C)  $24,537. 
D)  $0. 
A)  $380,000. 
B)  $116,842. 
C)  $24,537. 
D)  $0.

Which item has no effect on an S corporation's AAA?

Which item does not appear on Schedule K of Form 1120S?

Non-separately computed loss ______________ (increases, reduces) a S shareholder's stock basis.

An S shareholder's stock basis does not include a ratable share of S corporation liabilities.

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

AAA can have a negative balance.

An S shareholder's stock basis is reduced by flow-through losses before accounting for distributions.

As with partnerships, the income, deductions, and tax credits of an S corporation ____________ to the shareholders annually.

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, Section 1231, and Recapture Provisions

Taxing Business Income

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 Reorganizations

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 item has no effect on an S corporation's AAA?

Which item does not appear on Schedule K of Form 1120S?

Non-separately computed loss ______________ (increases, reduces) a S shareholder's stock basis.

An S shareholder's stock basis does not include a ratable share of S corporation liabilities.

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

AAA can have a negative balance.

An S shareholder's stock basis is reduced by flow-through losses before accounting for distributions.

As with partnerships, the income, deductions, and tax credits of an S corporation ____________ to the shareholders annually.

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, Section 1231, and Recapture Provisions

Taxing Business Income

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 Reorganizations

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