Question 1

Beginning in 2011,the AAA of Ewing,Inc.,an S corporation,has a balance of $725,000.During the year,the following items occur.  Ewing's ending AAA balance is:

Accepted Answer

A)   $1,153,150.
B)   $1,134,150.
C)   $1,127,650.
D)   $1,126,750.E) B) and D)
F) A) and B)

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Claude Bergeron sold 1,000 shares of Ditta,Inc.,an S corporation located in Concord,North Carolina,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 of any gain or loss.

Accepted Answer

A)   No gain or loss.
B)   $50,000 LTCL; $49,000 ordinary deduction.
C)   $50,000 ordinary deduction; $49,000 LTCL.
D)   $99,000 long-term capital loss.
E)   None of the above.F) C) and D)
G) A) and B)

Question 4

Pepper,Inc.,an S corporation in Norfolk,VA,generates revenues of $400,000,taxable interest of $380,000,operating expenses of $250,000,and deductions attributable to the interest income of $140,000.Calculate any passive investment income penalty tax payable by Pepper.

Accepted Answer

Pepper pays a § 1375...

Question 5

An S shareholder's basis in his or her stock can be reduced below zero.

Accepted Answer

A) True 
 B)False

Question 6

You are a 60% owner of an S corporation.Calculate your ending stock basis,based upon these facts.

Accepted Answer

$42,570 + $15,000 +....

Question 7

If an S corporation shareholder's basis in a loan to the entity has been reduced,the shareholder recognizes gross income when the S corporation ____________________ the shareholder.

Accepted Answer

The answer of If an S corporation shareholder's basis in...

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The alternative minimum tax may apply to an S corporation.

Accepted Answer

A) True 
 B)False

Question 10

The § 1374 tax is a corporate-level tax on any built-in gain recognized in 2011 when an S corporation disposes of an asset in a taxable disposition within 7 tax years after the date on which the S election took effect.

Accepted Answer

A) True 
 B)False

Question 11

An S shareholder who dies during the corporate tax year must report his or her share of the pro rata income (or loss)up to the date of death on the final individual tax return.

Accepted Answer

A) True 
 B)False

Question 12

The amount of any distribution to an S corporation shareholder is equal to the ____________________ plus the fair market value of any other property distributed..

Accepted Answer

The answer of The amount of any distribution to an...

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Which event will not terminate an S election?

Accepted Answer

A)   Receipt of passive income.
B)   Share of stock given to a nonresident alien.
C)   Shares of stock given to a corporation.
D)   A second class of stock issued.
E)   All of the above terminate an election.F) B) and D)
G) C) and E)

Question 15

Consent to an S election must be in ____________________,and it must be generally filed by the election ____________________.
or

Accepted Answer

The answer of Consent to an S election must be...

Question 16

Liabilities affect owners' basis differently between a partnership and an S corporation.

Accepted Answer

A) True 
 B)False

Question 17

Which of these tax provisions does not apply to an S corporation?

Accepted Answer

A)   Section 1244 stock.
B)   "Partial liquidation" stock redemption.
C)   Tax-free "A" reorganization.
D)   Section 1202 capital gain exclusion.E) All of the above
F) A) and B)

Question 18

Gene Grams is a 45% owner of a calendar year S corporation during 2011.His beginning stock basis is $230,000,and the S corporation reports the following items.
  Calculate Grams' stock basis at year-end.

Accepted Answer

The answer of Gene Grams is a 45% owner of...

Question 19

Which item does not appear in an S corporation's nonseparately computed income?

Accepted Answer

A)   Net sales.
B)   Tax-exempt income.
C)   Cost of goods sold.
D)   Depreciation recapture.
E)   All of the above appear.F) None of the above
G) A) and B)

Question 20

Depreciation recapture income is a ____________________ computed amount.

Accepted Answer

The answer of Depreciation recapture income is a ____________________ computed...

Exam 22: S Corporations

Gene Grams is a 45% owner of a calendar year S corporation during 2011.His beginning stock basis is $230,000,and the S corporation reports the following items. Calculate Grams' stock basis at year-end.

Correct Answer
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Consent to an S election must be in ,and it must be generally filed by the election . or

Correct Answer
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Which of these tax provisions does not apply to an S corporation?

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

Correct Answer
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The amount of any distribution to an S corporation shareholder is equal to the ____________________ plus the fair market value of any other property distributed..

Correct Answer
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If an S corporation shareholder's basis in a loan to the entity has been reduced,the shareholder recognizes gross income when the S corporation ____________________ the shareholder.

Correct Answer
verified

Correct Answer
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The § 1374 tax is a corporate-level tax on any built-in gain recognized in 2011 when an S corporation disposes of an asset in a taxable disposition within 7 tax years after the date on which the S election took effect.

Correct Answer
verified

The alternative minimum tax may apply to an S corporation.

Correct Answer
verified

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

Correct Answer
verified

You are a 60% owner of an S corporation.Calculate your ending stock basis,based upon these facts.

Correct Answer
verified
$42,570 + $15,000 +....
View Answer

Beginning in 2011,the AAA of Ewing,Inc.,an S corporation,has a balance of $725,000.During the year,the following items occur. Ewing's ending AAA balance is:

Correct Answer
verified

An S shareholder's basis in his or her stock can be reduced below zero.

Correct Answer
verified

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

Correct Answer
verified

An S shareholder who dies during the corporate tax year must report his or her share of the pro rata income (or loss)up to the date of death on the final individual tax return.

Correct Answer
verified

Depreciation recapture income is a ____________________ computed amount.

Correct Answer
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Pepper,Inc.,an S corporation in Norfolk,VA,generates revenues of $400,000,taxable interest of $380,000,operating expenses of $250,000,and deductions attributable to the interest income of $140,000.Calculate any passive investment income penalty tax payable by Pepper.

Correct Answer
verified
Pepper pays a § 1375...
View Answer

Which item does not appear in an S corporation's nonseparately computed income?

Correct Answer
verified

Liabilities affect owners' basis differently between a partnership and an S corporation.

Correct Answer
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Which event will not terminate an S election?

Correct Answer
verified

Exam 22: S Corporations

Gene Grams is a 45% owner of a calendar year S corporation during 2011.His beginning stock basis is $230,000,and the S corporation reports the following items. Calculate Grams' stock basis at year-end.

Correct AnswerverifiedShow Answer

Consent to an S election must be in ____________________,and it must be generally filed by the election ____________________. or

Correct AnswerverifiedShow Answer

Which of these tax provisions does not apply to an S corporation?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The amount of any distribution to an S corporation shareholder is equal to the ____________________ plus the fair market value of any other property distributed..

Correct AnswerverifiedShow Answer

If an S corporation shareholder's basis in a loan to the entity has been reduced,the shareholder recognizes gross income when the S corporation ____________________ the shareholder.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The § 1374 tax is a corporate-level tax on any built-in gain recognized in 2011 when an S corporation disposes of an asset in a taxable disposition within 7 tax years after the date on which the S election took effect.

Correct AnswerverifiedShow Answer

The alternative minimum tax may apply to an S corporation.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

You are a 60% owner of an S corporation.Calculate your ending stock basis,based upon these facts.

Correct Answerverified$42,570 + $15,000 +....View AnswerShow Answer

Beginning in 2011,the AAA of Ewing,Inc.,an S corporation,has a balance of $725,000.During the year,the following items occur. Ewing's ending AAA balance is:

Correct AnswerverifiedShow Answer

An S shareholder's basis in his or her stock can be reduced below zero.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An S shareholder who dies during the corporate tax year must report his or her share of the pro rata income (or loss)up to the date of death on the final individual tax return.

Correct AnswerverifiedShow Answer

Depreciation recapture income is a ____________________ computed amount.

Correct AnswerverifiedShow Answer

Pepper,Inc.,an S corporation in Norfolk,VA,generates revenues of $400,000,taxable interest of $380,000,operating expenses of $250,000,and deductions attributable to the interest income of $140,000.Calculate any passive investment income penalty tax payable by Pepper.

Correct AnswerverifiedPepper pays a § 1375...View AnswerShow Answer

Which item does not appear in an S corporation's nonseparately computed income?

Correct AnswerverifiedShow Answer

Liabilities affect owners' basis differently between a partnership and an S corporation.

Correct AnswerverifiedShow Answer

Which event will not terminate an S election?

Correct AnswerverifiedShow Answer

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Consent to an S election must be in ,and it must be generally filed by the election . or

Correct Answer
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$42,570 + $15,000 +....
View Answer

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Pepper pays a § 1375...
View Answer

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