Question 1

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 2

During 2012, Dana Rippel, the sole shareholder of a calendar year S corporation, received a distribution of $16,000.On December 31, 2011, her stock basis was $4,000.The corporation earned $11,000 ordinary income during the year.It has no accumulated E & P.Which statement is correct?

Accepted Answer

A)  Rippel recognizes a $1,000 LTCG.
B)  Rippel's stock basis will be $2,000.
C)  Rippel's ordinary income is $15,000.
D)  Rippel's return of capital is $11,000.E) A) and B)
F) All of the above

Question 3

During 2012, 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.
B)  Ordinary income of $103,000 and long-term capital gain of $5,000.
C)  Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss.
D)  Ordinary income of $109,000.E) All of the above
F) C) and D)

Question 4

The Section 179 expense deduction is a Schedule K item.

Accepted Answer

A) True 
 B)False

Question 5

The alternative minimum tax applies to an S corporation.

Accepted Answer

A) True 
 B)False

Question 6

Individuals Adam and Bonnie form an S corporation, with Adam contributing cash of $100,000 for a 50% interest and Bonnie contributing appreciated ordinary income property with an adjusted basis of $20,000 and a fair market value of $100,000.

Accepted Answer

The answer of Individuals Adam and Bonnie form an S...

Question 7

Beginning in 2012, Ewing, Inc., an S corporation, holds a AAA balance of $695,100.During the year, the following items occur.  Ewing's ending AAA balance is:

Accepted Answer

A)  $1,104,250.
B)  $1,110,250.
C)  $1,123,250.
D)  $1,180,250.E) C) and D)
F) A) and B)

Question 8

The § 1202 exclusion of _________________ on the disposition of small business stock (is/is not) _________________ available for S stock.

Accepted Answer

The answer of The § 1202 exclusion of _________________ on...

Question 9

When an S corporation liquidates, which of its tax attributes disappear?

Accepted Answer

A)  AAA.
B)  AEP.
C)  Suspended losses.
D)  All of the above items disappear.E) A) and B)
F) A) and C)

Question 10

Post-termination distributions that are charged against OAA are received tax-free.

Accepted Answer

A) True 
 B)False

Question 11

Grams, Inc., a calendar year S corporation, reports $20,000 DPGR and $15,000 of wages, and the S corporation's QPAI is $5,000.Janet has a 40% interest in the S corporation.All expenses that reduce DPGR are from wages, and all wages paid relate to DPGR.How much QPAI and wages are allocated to Janet?

Accepted Answer

A)  None.
B)  $2,000 and $6,000.
C)  $5,000 and $15,000.
D)  $5,000 and $20,000.E) All of the above
F) C) and D)

Question 12

Which statement is incorrect?

Accepted Answer

A)  S corporations are treated as corporations under state law.
B)  S corporations resemble partnerships under the Federal income tax law.
C)  The alternative minimum tax applies to some S corporations.
D)  An S corporation may not allocate income and deduction items to specific shareholders like a partnership can.E) C) and D)
F) B) and C)

Question 13

An S corporation may be subject to the following tax.

Accepted Answer

A)  Built-in gains tax.
B)  Foreign earnings tax.
C)  Federal income tax.
D)  Alternative minimum tax.E) B) and C)
F) C) and D)

Question 14

Which statement is incorrect with respect to the number-of-shareholders test in filing an S election?

Accepted Answer

A)  Husband Jaime and wife Maria count as one shareholder.
B)  Grandmother Adela and granddaughter Maria count as one shareholder.
C)  Husband Jaime and the estate of wife Maria count as one shareholder.
D)  Husband Jaime and ex-wife Isabel count as one shareholder.
E)  None of the above statements is incorrect.F) A) and C)
G) None of the above

Question 15

____________________ common stock and ____________________ preferred stock (with preference on dividends) are treated as two different classes of stock by the S corporation rules.

Accepted Answer

The answer of ____________________ common stock and ____________________ preferred stock...

Question 16

Which type of distribution from an S corporation is taxed at the 0/15% Federal income tax rate?

Accepted Answer

A)  AAA.
B)  Nonseparately computed income.
C)  OAA.
D)  AEP.
E)  None of the above.F) B) and D)
G) A) and B)

Question 17

An S corporation reports a recognized built-in gain of $110,000 and taxable income of $98,000.The company has an $8,000 NOL carryforward from a C corporation year, and a $7,000 business credit carryforward from a C corporation year.The built-in gains tax liability is:

Accepted Answer

A)  $31,500.
B)  $28,700.
C)  $24,500.
D)  $0.E) None of the above
F) A) and B)

Question 18

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

Accepted Answer

A)  Any method agreed to by all of the shareholders.
B)  Per-day allocation.
C)  FIFO method.
D)  LIFO method.E) None of the above
F) B) and C)

Question 19

S corporation status provides many of the benefits of ____________________ taxation and at the same time gives the owner ____________________ ____________________ protection from creditors.
or

Accepted Answer

Partnershi...

Question 20

A two-or-more member LLC operates under partnership tax principles.

Accepted Answer

A) True 
 B)False

Exam 22: S: Corporations

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

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During 2012, 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:

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During 2012, Dana Rippel, the sole shareholder of a calendar year S corporation, received a distribution of $16,000.On December 31, 2011, her stock basis was $4,000.The corporation earned $11,000 ordinary income during the year.It has no accumulated E & P.Which statement is correct?

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The alternative minimum tax applies to an S corporation.

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Which statement is incorrect with respect to the number-of-shareholders test in filing an S election?

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The Section 179 expense deduction is a Schedule K item.

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Grams, Inc., a calendar year S corporation, reports $20,000 DPGR and $15,000 of wages, and the S corporation's QPAI is $5,000.Janet has a 40% interest in the S corporation.All expenses that reduce DPGR are from wages, and all wages paid relate to DPGR.How much QPAI and wages are allocated to Janet?

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Post-termination distributions that are charged against OAA are received tax-free.

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S corporation status provides many of the benefits of ____________________ taxation and at the same time gives the owner ____________________ ____________________ protection from creditors. or

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Individuals Adam and Bonnie form an S corporation, with Adam contributing cash of $100,000 for a 50% interest and Bonnie contributing appreciated ordinary income property with an adjusted basis of $20,000 and a fair market value of $100,000.

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The § 1202 exclusion of _________________ on the disposition of small business stock (is/is not) _________________ available for S stock.

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Beginning in 2012, Ewing, Inc., an S corporation, holds a AAA balance of $695,100.During the year, the following items occur. Ewing's ending AAA balance is:

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An S corporation reports a recognized built-in gain of $110,000 and taxable income of $98,000.The company has an $8,000 NOL carryforward from a C corporation year, and a $7,000 business credit carryforward from a C corporation year.The built-in gains tax liability is:

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When an S corporation liquidates, which of its tax attributes disappear?

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A two-or-more member LLC operates under partnership tax principles.

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

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An S corporation may be subject to the following tax.

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Which statement is incorrect?

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____________________ common stock and ____________________ preferred stock (with preference on dividends) are treated as two different classes of stock by the S corporation rules.

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Which type of distribution from an S corporation is taxed at the 0/15% Federal income tax rate?

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S corporation status provides many of the benefits of taxation and at the same time gives the owner protection from creditors. or

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Partnershi...
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The § 1202 exclusion of _ on the disposition of small business stock (is/is not) _ available for S stock.

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common stock and preferred stock (with preference on dividends) are treated as two different classes of stock by the S corporation rules.

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