Question 1

The § 1202 exclusion of gain is available on disposition of S corporation stock.

Accepted Answer

A) True 
 B)False

Question 2

Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2?

Accepted Answer

A)  Charitable contributions.
B)  Unreasonable compensation.
C)  Payroll tax penalty assessed.
D)  Domestic production activities deduction.
E)  None of the above.F) All of the above
G) D) and E)

Question 3

Any losses that are suspended under the at-risk rules are carried forward and are available during an S corporation's post-termination period.

Accepted Answer

A) True 
 B)False

Question 4

Randall owns 800 shares in Fabrication,Inc. ,an S corporation in Moss Hill,Texas.In 2012,his basis in his stock is $30,000,before the adjustment for this year's losses.During 2012,Randall's share of the corporation's ordinary loss is $20,000 and his share of its capital loss is $15,000.How much can Randall deduct due to these losses?

Accepted Answer

A)  No deduction.
B)  $15,000 ordinary loss;$10,000 capital loss.
C)  $17,143 ordinary loss;$12,857 capital loss.
D)  $20,000 ordinary loss;$15,000 capital loss.E) B) and C)
F) None of the above

Question 5

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 6

Blue Corporation elects S status effective for tax year 2012.As of January 1,2012,Blue's assets were appraised as follows.

Accepted Answer

The answer of Blue Corporation elects S status effective for...

Question 7

The Schedule M-3 is the same for a C corporation and an S corporation.

Accepted Answer

A) True 
 B)False

Question 8

Where the S corporation rules are silent,partnership rules apply to the S corporation.

Accepted Answer

A) True 
 B)False

Question 9

The LIFO recapture tax is a variation of the passive investment income penalty tax.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A)  Intangible drilling costs.
B)  Foreign loss.
C)  Utilities expense.
D)  Recovery of a tax benefit.
E)  All of the above items appear on Schedule K.F) None of the above
G) B) and E)

Question 11

An S corporation recognizes a ____________________ on any distribution of appreciated property.

Accepted Answer

The answer of An S corporation recognizes a ____________________ on...

Question 12

Most IRAs can own stock in an S corporation.

Accepted Answer

A) True 
 B)False

Question 13

An S shareholder's stock basis includes a ratable share of any S corporation liabilities.

Accepted Answer

A) True 
 B)False

Question 14

A new S corporation shareholder can revoke the S election unilaterally,if he/she owns how much of the existing S corporation's stock?

Accepted Answer

A)  More than 50%.
B)  50% or more.
C)  The election can be revoked only if all of the shareholders consent.
D)  The election cannot be revoked during the first year of the new shareholder's ownership.E) B) and C)
F) All of the above

Exam 12: S: Corporations

The Schedule M-3 is the same for a C corporation and an S corporation.

Correct Answer
verified

The § 1202 exclusion of gain is available on disposition of S corporation stock.

Correct Answer
verified

Correct Answer
verified

A new S corporation shareholder can revoke the S election unilaterally,if he/she owns how much of the existing S corporation's stock?

Correct Answer
verified

Blue Corporation elects S status effective for tax year 2012.As of January 1,2012,Blue's assets were appraised as follows.

Correct Answer
verified

Most IRAs can own stock in an S corporation.

Correct Answer
verified

Any losses that are suspended under the at-risk rules are carried forward and are available during an S corporation's post-termination period.

Correct Answer
verified

An S shareholder's stock basis includes a ratable share of any S corporation liabilities.

Correct Answer
verified

Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2?

Correct Answer
verified

Where the S corporation rules are silent,partnership rules apply to the S corporation.

Correct Answer
verified

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

Correct Answer
verified

The LIFO recapture tax is a variation of the passive investment income penalty tax.

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

An S corporation recognizes a ____________________ on any distribution of appreciated property.

Correct Answer
verified

Exam 12: S: Corporations

The Schedule M-3 is the same for a C corporation and an S corporation.

Correct AnswerverifiedShow Answer

The § 1202 exclusion of gain is available on disposition of S corporation stock.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A new S corporation shareholder can revoke the S election unilaterally,if he/she owns how much of the existing S corporation's stock?

Correct AnswerverifiedShow Answer

Blue Corporation elects S status effective for tax year 2012.As of January 1,2012,Blue's assets were appraised as follows.

Correct AnswerverifiedShow Answer

Most IRAs can own stock in an S corporation.

Correct AnswerverifiedShow Answer

Any losses that are suspended under the at-risk rules are carried forward and are available during an S corporation's post-termination period.

Correct AnswerverifiedShow Answer

An S shareholder's stock basis includes a ratable share of any S corporation liabilities.

Correct AnswerverifiedShow Answer

Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2?

Correct AnswerverifiedShow Answer

Where the S corporation rules are silent,partnership rules apply to the S corporation.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The LIFO recapture tax is a variation of the passive investment income penalty tax.

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

An S corporation recognizes a ____________________ on any distribution of appreciated property.

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified