Question 1

It is beneficial for an S corporation to issue § 1244 stock.

Accepted Answer

A) True 
 B)False

Question 2

Any distribution of cash or property by a corporation that does not exceed the balance of AAA with respect to the stock during a post-termination transition period of approximately one year is applied against and reduces the adjusted basis of the stock.

Accepted Answer

A) True 
 B)False

Question 3

Several individuals acquire assets on behalf of Skip Corporation on May 28,2011,purchased assets on June 3,2011,and begin doing business on June 11,2011.They subscribe to shares of stock,file articles of incorporation for Skip,and become shareholders on June 21,2011.The S election must be filed no later than 2 1/2 months after:

Accepted Answer

A)   May 28, 2011.
B)   June 3, 2011.
C)   June 11, 2011.
D)   June 21, 2011.
E)   December 31, 2011.F) A) and D)
G) A) and C)

Question 4

The maximum number of S shareholders is:

Accepted Answer

A)   75.
B)   100.
C)   200.
D)   Some other fixed amount.
E)   Indeterminable.F) D) and E)
G) A) and C)

Question 5

Which could constitute a second class of stock under the S corporation rules?

Accepted Answer

A)   Treasury stock.
B)   Phantom stock.
C)   Unexercised stock options.
D)   Warrants.
E)   None of the above.F) A) and C)
G) A) and E)

Question 6

To make a valid S election,the entity must file a properly completed Form ____________________.

Accepted Answer

The answer of To make a valid S election,the entity...

Question 7

Identify a disadvantage of S corporation status.

Accepted Answer

A)   Most trusts can be shareholders.
B)   Losses flow through to the shareholders.
C)   The ACE adjustment is avoided.
D)   Tax-exempt income flows through to the shareholders.
E)   None of the above is a disadvantage of the S election.F) B) and E)
G) A) and B)

Question 8

The alternative minimum tax does not apply to an S corporation.

Accepted Answer

A) True 
 B)False

Question 9

An S corporation in Lawrence,Kansas has 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)   $0.
B)   $24,500.
C)   $28,700.
D)   $31,500.
E)   None of the above.F) B) and D)
G) C) and D)

Question 10

An S corporation may be subject to the following tax:

Accepted Answer

A)   Corporation income tax (§ 11) .
B)   Passive investment income tax.
C)   Alternative minimum tax.
D)   None of the above applies to S corporations.E) All of the above
F) B) and D)

Question 11

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

Accepted Answer

A)   A resident alien.
B)   Limited liability company.
C)   A foreign corporation.
D)   A Roth IRA.
E)   None of the above can own S corporation stock.F) A) and E)
G) A) and B)

Question 12

A qualifying S election requires the consent of ____________________ of the corporate shareholders.
or

Accepted Answer

The answer of A qualifying S election requires the consent...

Question 13

A distribution of cash or other property by an S corporation to shareholders that does not exceed the balance of AAA during a one-year period following an S election termination receives special capital gain treatment.

Accepted Answer

A) True 
 B)False

Question 14

Which,if any,of the following items has no effect on the stock basis of an S corporation shareholder?

Accepted Answer

A)   Net sales.
B)   Long-term capital gain.
C)   Cost of goods sold.
D)   Short-term capital loss.
E)   A mortgage taken by the S corporation.F) A) and B)
G) A) and E)

Question 15

Which statement is false?

Accepted Answer

A)   Partnership taxation rules do not apply to S corporations.
B)   A two-or-more member LLC operates under partnership principles.
C)   All income of an S corporation flows through to the S shareholders.
D)   S shareholders may use their proportionate shares of NOLs currently.
E)   None of the above.F) B) and E)
G) C) and D)

Question 16

Discuss the two methods of allocating S items to shareholders.

Accepted Answer

A per-day,per-share method must be used ...

Question 17

An S corporation must possess the following characteristic(s) :

Accepted Answer

A)   No more than 100 shareholders.
B)   Corporation organized in the U.S.
C)   Only one class of stock.
D)   All of the above are required of S corporations.
E)   None of the above is required for S corporations.F) C) and D)
G) A) and E)

Question 18

Which statement is incorrect with respect to filing for an S election?

Accepted Answer

A)   Form 2553 must be filed.
B)   All shareholders must consent.
C)   The election may be filed in the previous year.
D)   An extension of time is available for filing Form 2553.
E)   None of the above are incorrect.F) C) and D)
G) A) and C)

Question 19

Pass-through S corporation losses can reduce the basis in the shareholder's loan to the entity,but distributions do not.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

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

Exam 22: S Corporations

Which statement is incorrect with respect to filing for an S election?

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

Correct Answer
verified

A qualifying S election requires the consent of ____________________ of the corporate shareholders. or

Correct Answer
verified

An S corporation in Lawrence,Kansas has 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:

Correct Answer
verified

The alternative minimum tax does not apply to an S corporation.

Correct Answer
verified

Which statement is false?

Correct Answer
verified

Identify a disadvantage of S corporation status.

Correct Answer
verified

Pass-through S corporation losses can reduce the basis in the shareholder's loan to the entity,but distributions do not.

Correct Answer
verified

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

Correct Answer
verified

Discuss the two methods of allocating S items to shareholders.

Correct Answer
verified
A per-day,per-share method must be used ...
View Answer

A distribution of cash or other property by an S corporation to shareholders that does not exceed the balance of AAA during a one-year period following an S election termination receives special capital gain treatment.

Correct Answer
verified

An S corporation may be subject to the following tax:

Correct Answer
verified

To make a valid S election,the entity must file a properly completed Form ____________________.

Correct Answer
verified

Which,if any,of the following items has no effect on the stock basis of an S corporation shareholder?

Correct Answer
verified

An S corporation must possess the following characteristic(s) :

Correct Answer
verified

Any distribution of cash or property by a corporation that does not exceed the balance of AAA with respect to the stock during a post-termination transition period of approximately one year is applied against and reduces the adjusted basis of the stock.

Correct Answer
verified

Which could constitute a second class of stock under the S corporation rules?

Correct Answer
verified

The maximum number of S shareholders is:

Correct Answer
verified

It is beneficial for an S corporation to issue § 1244 stock.

Correct Answer
verified

Correct Answer
verified

Exam 22: S Corporations

Which statement is incorrect with respect to filing for an S election?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A qualifying S election requires the consent of ____________________ of the corporate shareholders. or

Correct AnswerverifiedShow Answer

An S corporation in Lawrence,Kansas has 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:

Correct AnswerverifiedShow Answer

The alternative minimum tax does not apply to an S corporation.

Correct AnswerverifiedShow Answer

Which statement is false?

Correct AnswerverifiedShow Answer

Identify a disadvantage of S corporation status.

Correct AnswerverifiedShow Answer

Pass-through S corporation losses can reduce the basis in the shareholder's loan to the entity,but distributions do not.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Discuss the two methods of allocating S items to shareholders.

Correct AnswerverifiedA per-day,per-share method must be used ...View AnswerShow Answer

A distribution of cash or other property by an S corporation to shareholders that does not exceed the balance of AAA during a one-year period following an S election termination receives special capital gain treatment.

Correct AnswerverifiedShow Answer

An S corporation may be subject to the following tax:

Correct AnswerverifiedShow Answer

To make a valid S election,the entity must file a properly completed Form ____________________.

Correct AnswerverifiedShow Answer

Which,if any,of the following items has no effect on the stock basis of an S corporation shareholder?

Correct AnswerverifiedShow Answer

An S corporation must possess the following characteristic(s) :

Correct AnswerverifiedShow Answer

Any distribution of cash or property by a corporation that does not exceed the balance of AAA with respect to the stock during a post-termination transition period of approximately one year is applied against and reduces the adjusted basis of the stock.

Correct AnswerverifiedShow Answer

Which could constitute a second class of stock under the S corporation rules?

Correct AnswerverifiedShow Answer

The maximum number of S shareholders is:

Correct AnswerverifiedShow Answer

It is beneficial for an S corporation to issue § 1244 stock.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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A per-day,per-share method must be used ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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