FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 22: S Corporations

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Short Answer

Review LaterAdd Note

Review Later

Tax-exempt income is listed on Schedule of Form 1120S.

Correct Answer

verified

Show Answer

Question 42

True/False

Review LaterAdd Note

Review Later

If a resident alien shareholder moves outside the U.S., the S election is terminated.

A) True
B) False

Correct Answer

verified

Show Answer

Question 43

True/False

Review LaterAdd Note

The carryover period for the NOLs of a C corporation does not continue to run during S corporation years.

On January 1, Bobby and Alice own equally all of the stock of an electing S corporation called Prairie Dirt Delight. The dirt company has a $60,000 loss for a non-leap year. On the 200th day of the year, Bobby sells his one-half of the stock to his son, Saul. How much of the $60,000 loss, if any, is allocated to Bobby?

The maximum number of actual shareholders in an S corporation is:

A calendar year C corporation reports a $41,000 NOL in 2013, but it elects S status for 2014 and generates an NOL of $30,000 in that year. At all times during 2014, 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 2014. How much of the 2014 loss, if any, is deductible by Kris?

A cash basis calendar year C corporation reports $100,000 of accounts receivable on the date of its conversion to S status on February 14. By the end of the year, $60,000 of these receivables are collected. Calculate any built-in gains tax, assuming that there is sufficient taxable income.

Which, if any, of the following can be eligible shareholders of an S corporation?

What method is used to allocate S corporation income or losses (unless an election to the contrary is made) ?

Claude Bergeron sold 1,000 shares of Ditta, Inc., an S corporation, for $12,000. He had owned the stock for three years and had a stock basis of $111,000 in the shares. Claude is single, and he is the original owner of the § 1244 stock shares. Calculate the appropriate tax treatment.

An S corporation does not recognize a loss when distributing assets that are worth less than their basis.

Any excess of S corporation losses or deductions over the shareholder's combined stock and debt basis is suspended until there is a subsequent stock or debt basis.

Bidden, Inc., a calendar year S corporation, incurred the following items. $\begin{array}{lr}\text { Sales } & \$ 130,000 \\\text { Depreciation recapture income } & 12,000 \\\text { Short-term capital gain } & 30,000 \\\text { Cost of goods sold } & (42,000) \\\text { Municipal bond interest income } & 7,000\\\text { Administrative expenses } & (15,000) \\\text { Depreciation expense } & (17,000) \\\text { Charitable contributions } & (14,000) \\\text { Calculate Bidden's nonseparately computed income } &\end{array}$

A capital loss allocated to a shareholder always reduces the Other Adjustments Account.

An S corporation can claim a deduction for its NOL carryovers.

On December 31, 2014, Erica Sumners owns one share of an S corporation's 10 outstanding shares of stock. The basis of Erica's share is $300. During 2015, the S corporation incurs a loss of $3,650. Determine the amount of the loss allocated to Erica, and calculate her stock basis at the end of 2015.

Tax-exempt income is not separately stated on Schedule K of Form 1120S.

The corporate-level tax on recognized built-in gains applies in 2014 when an S corporation disposes of an asset in a taxable disposition within ten 12-months years after the date on which the S election took effect.

A distribution from OAA is taxable.

Compensation for services rendered to an S corporation is subject to FICA taxes.