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Exam 22: S: Corporations

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Question 61

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

A) A child, age 10.
B) A resident alien.
C) A voting trust.
D) The estate of a deceased shareholder.
E) All of the above can own S stock.

F) C) and D)
G) D) and E)

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Question 62

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A distribution from OAA is not taxable.

A) True
B) False

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Question 63

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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.

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:

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?

How large must total assets on Schedule L be at the end of the year for an S corporation to be required to file Schedule M-3?

The alternative minimum tax applies to an S corporation.

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

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

An S corporation's LIFO recapture amount equals the excess of the inventory's value under ____________________ over the ____________________ value.

Which statement is incorrect?

An S corporation's separately stated items generally are identical to those separately stated by _________________________.

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

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

For Federal income tax purposes, taxation of S corporations resembles that of partnerships.

Rents always are considered to be passive investment income in S status.

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

Samantha owned 1,000 shares in Evita, Inc., an S corporation, that uses the calendar year. On October 11, 2012, Samantha sells all of her Evita stock. Her basis at the beginning of 2012 was $60,000. Her share of the corporate income for 2012 was $22,000, and she receives a distribution of $35,000 between January 1 and October 11, 2012. Her stock basis at the time of the sale is:

You are given the following facts about a one-shareholder S corporation. Prepare the shareholder's ending stock basis.

No maximum or minimum dollar sales or capitalization restrictions apply to S corporations.