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Exam 22: S Corporations

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Question 61

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

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Question 62

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

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Question 63

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Depreciation recapture income is a ____________________ computed amount.

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

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

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

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

Which event will not terminate an S election?

The alternative minimum tax may apply to an S corporation.

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.

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

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.

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.

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.

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.

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

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:

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

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.

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