Question 1

For the calendar year, Elk Corporation, an S corporation, has book income of $55,000, which includes $45,000 from operations and a $10,000 net long- term capital gain. During the year, $22,500 is distributed to Elk's three equal shareholders, all of whom are calendar- year taxpayers. What are Elk's total ordinary income and capital gain pass- throughs for the year?

Accepted Answer

The answer of For the calendar year, Elk Corporation, an...

Question 2

Jeff owns 50% of an S corporation's stock with a basis in his stock of $50,000 on January 1. In addition, the S corporation owes Jeff $30,000 on January 1. The debt has a basis of $30,000 and is evidenced by a note. The S corporation reports an ordinary loss of $150,000 for the current year. The next year, it reports ordinary income of
$20,000. On January 1 of the third year, the note is repaid. Due to the repayment of the note, Jeff must report what?

Accepted Answer

The answer of Jeff owns 50% of an S corporation's...

Question 3

Dixon Corporation was incorporated on January 1, 2005. The corporation made its S election on April 1, 2008. The corporation retains an E&P balance from its C corporation days. Which one of the following current- year income and expense items is not included in Dixon Corporation's Accumulated Adjustments Account?

Accepted Answer

A)  tax- exempt bond interest income 
B)  long- term capital gains and losses 
C)  ordinary income or loss 
D)  amortization of organizational expenditures

Exam 11: S Corporations