Question 1

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) A) and D)
G) C) and D)

Question 2

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) C) and D)
F) B) and D)

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Straight debt issued in an S corporation year will not be treated as a second class of stock and will not disqualify an S election.

Accepted Answer

A) True 
 B)False

Question 5

Which statement is false?

Accepted Answer

A)   S corporation status provides many of the benefits of partnership treatment.
B)   S corporation shareholders have limited liability.
C)   Distributions of appreciated assets are not taxable in an S corporation.
D)   The personal holding company tax does not apply to an S corporation.
E)   None of the above.F) C) and D)
G) A) and D)

Question 6

Depletion in excess of basis in property causes a(n) ____________________ adjustment to an S shareholder's basis.
or

Accepted Answer

The answer of Depletion in excess of basis in property...

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Separately stated items are listed on Schedule _________________________ of the Form 1120S.

Accepted Answer

The answer of Separately stated items are listed on Schedule...

Question 9

Explain how family members are treated for purposes of the number of shareholders requirement concerning S corporation status.

Accepted Answer

A small business corporation theoretical...

Question 10

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) C) and E)
G) A) and B)

Question 11

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 C)
G) All of the above

Question 12

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 13

Which item does not appear on Schedule K of Form 1120S?

Accepted Answer

A)   Tax-exempt interest income.
B)   Depreciation recapture income.
C)   Section 179 expense deduction.
D)   Section 1231 loss.
E)   All of the above appear on Schedule K.F) All of the above
G) D) and E)

Question 14

You are given the following facts about a one-shareholder S corporation, and you are asked to prepare the shareholder's ending stock basis.

Accepted Answer

A)   $168,660.
B)   $170,800.
C)   $214,960.
D)   $263,960.E) All of the above
F) C) and D)

Question 15

Distributions of which assets during an S corporation's post-termination period receive favorable income tax treatment?

Accepted Answer

A)   Cash.
B)   Automobile.
C)   Real estate.
D)   Notes receivable.
E)   All of the above.F) C) and D)
G) A) and D)

Question 16

An S corporation can be a partner in a partnership.

Accepted Answer

A) True 
 B)False

Question 17

An item that appears in the "Other Adjustments Account" affects stock basis, but not AAA, such as tax-exempt life insurance proceeds.

Accepted Answer

A) True 
 B)False

Exam 12: S: Corporations

An item that appears in the "Other Adjustments Account" affects stock basis, but not AAA, such as tax-exempt life insurance proceeds.

Correct Answer
verified

Which item does not appear on Schedule K of Form 1120S?

Correct Answer
verified

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

Correct Answer
verified

Separately stated items are listed on Schedule _________________________ of the Form 1120S.

Correct Answer
verified

Depletion in excess of basis in property causes a(n) ____________________ adjustment to an S shareholder's basis. or

Correct Answer
verified

Which statement is false?

Correct Answer
verified

Distributions of which assets during an S corporation's post-termination period receive favorable income tax treatment?

Correct Answer
verified

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

Correct Answer
verified

Explain how family members are treated for purposes of the number of shareholders requirement concerning S corporation status.

Correct Answer
verified
A small business corporation theoretical...
View Answer

You are given the following facts about a one-shareholder S corporation, and you are asked to prepare the shareholder's ending stock basis.

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

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

Correct Answer
verified

Straight debt issued in an S corporation year will not be treated as a second class of stock and will not disqualify an S election.

Correct Answer
verified

An S corporation can be a partner in a partnership.

Correct Answer
verified

Which event will not terminate an S election?

Correct Answer
verified

Which statement is false?

Correct Answer
verified

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

Correct Answer
verified

Exam 12: S: Corporations

An item that appears in the "Other Adjustments Account" affects stock basis, but not AAA, such as tax-exempt life insurance proceeds.

Correct AnswerverifiedShow Answer

Which item does not appear on Schedule K of Form 1120S?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Separately stated items are listed on Schedule _________________________ of the Form 1120S.

Correct AnswerverifiedShow Answer

Depletion in excess of basis in property causes a(n) ____________________ adjustment to an S shareholder's basis. or

Correct AnswerverifiedShow Answer

Which statement is false?

Correct AnswerverifiedShow Answer

Distributions of which assets during an S corporation's post-termination period receive favorable income tax treatment?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Explain how family members are treated for purposes of the number of shareholders requirement concerning S corporation status.

Correct AnswerverifiedA small business corporation theoretical...View AnswerShow Answer

You are given the following facts about a one-shareholder S corporation, and you are asked to prepare the shareholder's ending stock basis.

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

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

Correct AnswerverifiedShow Answer

Straight debt issued in an S corporation year will not be treated as a second class of stock and will not disqualify an S election.

Correct AnswerverifiedShow Answer

An S corporation can be a partner in a partnership.

Correct AnswerverifiedShow Answer

Which event will not terminate an S election?

Correct AnswerverifiedShow Answer

Which statement is false?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A small business corporation theoretical...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified