Question 1

During 2011,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:

Accepted Answer

A)   Ordinary income of $103,000 and long-term capital gain of $5,000.
B)   Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss.
C)   Ordinary income of $108,000.
D)   None of the above.E) None of the above
F) A) and B)

Question 2

Non-separately computed loss ____________________ a S shareholder's stock basis.

Accepted Answer

The answer of Non-separately computed loss ____________________ a S shareholder's...

Question 3

You are given the following facts about a 40% owner of an S corporation,and you are asked to prepare her ending stock basis.

Accepted Answer

A)   $77,950.
B)   $82,750.
C)   $97,100.
D)   $103,225.
E)   Some other answer.F) C) and D)
G) B) and E)

Question 4

An S corporation that has total assets of at least $5 million on Schedule L at the end of the tax year must file a Schedule M-3.

Accepted Answer

A) True 
 B)False

Question 5

Randall owns 800 shares in Fabrication,Inc.,an S corporation in Moss Hill,Texas.In 2011,his basis in his stock is $30,000,before the adjustment for this year's losses.During 2011,Randall's share of the corporation's ordinary loss is $20,000 and his share of its capital loss is $15,000.How much can Randall deduct due to these losses?

Accepted Answer

A)   None.
B)   $15,000 ordinary loss; $10,000 capital loss.
C)   $17,143 ordinary loss; $12,857 capital loss.
D)   $20,000 ordinary loss; $15,000 capital loss.
E)   Some other amounts.F) All of the above
G) C) and D)

Question 6

A limited liability company can make an S election.

Accepted Answer

A) True 
 B)False

Question 7

An NOL from a Subchapter C year can be used to offset operating income in an S corporation year.

Accepted Answer

A) True 
 B)False

Question 8

An S election allows shareholders to realize tax benefits from losses immediately.

Accepted Answer

A) True 
 B)False

Question 9

With respect to passive losses,there are three classes of income,losses,and credits: ____________________,____________________,and passive.
or

Accepted Answer

act ive,po...

Question 10

Stock basis first is increased by income items,then ____________________ by distributions,and finally decreased by ____________________.

Accepted Answer

The answer of Stock basis first is increased by income...

Question 11

A corporation can revoke its S status prospectively.

Accepted Answer

A) True 
 B)False

Question 12

Any losses that are suspended under the at-risk rules are carried forward and are available during an S corporation's post-termination period.

Accepted Answer

A) True 
 B)False

Question 13

Which statement is false?

Accepted Answer

A)   S corporations are treated as corporations under state law.
B)   The alternative minimum tax applies to an S corporation.
C)   Liabilities affect S shareholders differently than partners.
D)   S corporations may not allocate income like partnerships.
E)   None of the above.F) D) and E)
G) A) and C)

Question 14

An S corporation shareholder's basis includes his or her direct investments plus a ratable share of any corporate liabilities.

Accepted Answer

A) True 
 B)False

Question 15

Post-termination distributions by a former S corporation that are charged against ____________________ do not get tax-free treatment.

Accepted Answer

The answer of Post-termination distributions by a former S corporation...

Question 16

Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2?

Accepted Answer

A)   Charitable contributions.
B)   Unreasonable compensation.
C)   Payroll tax penalty assessed.
D)   Domestic production activities deduction.
E)   None of the above.F) C) and D)
G) B) and C)

Question 17

In the case of a complete termination of an S corporation interest,a ____________________ tax year may occur.

Accepted Answer

The answer of In the case of a complete termination...

Question 18

Most Roth IRAs can own S corporation stock.

Accepted Answer

A) True 
 B)False

Question 19

A cash basis calendar year C corporation in Athens,Georgia,has $100,000 of accounts receivable on the date of its conversion to an S corporation on February 14.By the end of the year,$70,000 of these receivables are collected.Calculate any built-in gains tax,assuming that there is sufficient taxable income.

Accepted Answer

A)   $0.
B)   $10,500.
C)   $24,500.
D)   $35,000.
E)   Some other amount.F) B) and C)
G) C) and D)

Question 20

An S corporation can take advantage of the dividends received deduction.

Accepted Answer

A) True 
 B)False

Exam 22: S Corporations

Most Roth IRAs can own S corporation stock.

Correct Answer
verified

With respect to passive losses,there are three classes of income,losses,and credits: ,,and passive. or

Correct Answer
verified
act ive,po...
View Answer

Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2?

Correct Answer
verified

A limited liability company can make an S election.

Correct Answer
verified

In the case of a complete termination of an S corporation interest,a ____________________ tax year may occur.

Correct Answer
verified

An S corporation that has total assets of at least $5 million on Schedule L at the end of the tax year must file a Schedule M-3.

Correct Answer
verified

An S corporation can take advantage of the dividends received deduction.

Correct Answer
verified

Non-separately computed loss ____________________ a S shareholder's stock basis.

Correct Answer
verified

An NOL from a Subchapter C year can be used to offset operating income in an S corporation year.

Correct Answer
verified

During 2011,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:

Correct Answer
verified

You are given the following facts about a 40% owner of an S corporation,and you are asked to prepare her ending stock basis.

Correct Answer
verified

Stock basis first is increased by income items,then by distributions,and finally decreased by .

Correct Answer
verified

An S election allows shareholders to realize tax benefits from losses immediately.

Correct Answer
verified

Post-termination distributions by a former S corporation that are charged against ____________________ do not get tax-free treatment.

Correct Answer
verified

An S corporation shareholder's basis includes his or her direct investments plus a ratable share of any corporate liabilities.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A corporation can revoke its S status prospectively.

Correct Answer
verified

Any losses that are suspended under the at-risk rules are carried forward and are available during an S corporation's post-termination period.

Correct Answer
verified

Which statement is false?

Correct Answer
verified

Exam 22: S Corporations

Most Roth IRAs can own S corporation stock.

Correct AnswerverifiedShow Answer

With respect to passive losses,there are three classes of income,losses,and credits: ____________________,____________________,and passive. or

Correct Answerverifiedact ive,po...View AnswerShow Answer

Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2?

Correct AnswerverifiedShow Answer

A limited liability company can make an S election.

Correct AnswerverifiedShow Answer

In the case of a complete termination of an S corporation interest,a ____________________ tax year may occur.

Correct AnswerverifiedShow Answer

An S corporation that has total assets of at least $5 million on Schedule L at the end of the tax year must file a Schedule M-3.

Correct AnswerverifiedShow Answer

An S corporation can take advantage of the dividends received deduction.

Correct AnswerverifiedShow Answer

Non-separately computed loss ____________________ a S shareholder's stock basis.

Correct AnswerverifiedShow Answer

An NOL from a Subchapter C year can be used to offset operating income in an S corporation year.

Correct AnswerverifiedShow Answer

During 2011,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:

Correct AnswerverifiedShow Answer

You are given the following facts about a 40% owner of an S corporation,and you are asked to prepare her ending stock basis.

Correct AnswerverifiedShow Answer

Stock basis first is increased by income items,then ____________________ by distributions,and finally decreased by ____________________.

Correct AnswerverifiedShow Answer

An S election allows shareholders to realize tax benefits from losses immediately.

Correct AnswerverifiedShow Answer

Post-termination distributions by a former S corporation that are charged against ____________________ do not get tax-free treatment.

Correct AnswerverifiedShow Answer

An S corporation shareholder's basis includes his or her direct investments plus a ratable share of any corporate liabilities.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A corporation can revoke its S status prospectively.

Correct AnswerverifiedShow Answer

Any losses that are suspended under the at-risk rules are carried forward and are available during an S corporation's post-termination period.

Correct AnswerverifiedShow Answer

Which statement is false?

Correct AnswerverifiedShow Answer

Correct Answer
verified

With respect to passive losses,there are three classes of income,losses,and credits: ,,and passive. or

Correct Answer
verified
act ive,po...
View Answer

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Stock basis first is increased by income items,then by distributions,and finally decreased by .

Correct Answer
verified

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Correct Answer
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