Question 1

An S corporation must possess which of the following characteristics?

Accepted Answer

A)  Not more than one hundred shareholders.
B)  Corporation organized in the U.S.
C)  Only one class of stock.
D)  All of the above are required of an S corporation.
E)  None of the above are required of an S corporation.F) A) and C)
G) B) and C)

Question 2

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

Accepted Answer

The answer of An S corporation's LIFO recapture amount equals...

Question 3

A per-day, per-share allocation of flow-through S corporation items must be used, unless the shareholder disposes of the entire interest in the entity.

Accepted Answer

A) True 
 B)False

Question 4

If an S corporation's beginning balance in OAA is zero, and the following transactions occur, what is the ending OAA balance?
​

Accepted Answer

A)  $1,300
B)  $7,600
C)  $23,300
D)  $27,500
E)  None of the aboveF) C) and E)
G) A) and C)

Question 5

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 6

You are given the following facts about a 50% owner of an S corporation. Compute her ending stock basis.
​

Accepted Answer

A)  $80,950
B)  $85,750
C)  $100,100
D)  $106,225
E)  Some other amountF) B) and E)
G) B) and D)

Question 7

Any distribution made by an S corporation during a tax year is taken into account before accounting for the year's losses.

Accepted Answer

A) True 
 B)False

Question 8

Most IRAs cannot own stock in an S corporation.

Accepted Answer

A) True 
 B)False

Question 9

Gene Grams is a 45% owner of a calendar year S corporation during the tax year. His beginning stock basis is $230,000, and the S corporation reports the following items.
​
  
Calculate Grams's stock basis at year-end.

Accepted Answer

The answer of Gene Grams is a 45% owner of...

Question 10

You are given the following facts about a solely owned S corporation. What is the shareholder's ending stock basis?
​

Accepted Answer

A)  $61,800
B)  $68,100
C)  $99,100
D)  $100,100
E)  Some other amountF) B) and E)
G) A) and B)

Question 11

Which item has no effect on an S corporation's AAA?

Accepted Answer

A)  Stock purchase by a shareholder.
B)  Interest expense.
C)  Cost of goods sold.
D)  Capital loss.
E)  All of the above modify AAA.F) A) and B)
G) A) and C)

Question 12

A cash basis calendar year C corporation reports $100,000 of accounts receivable on the date of its conversion to S status on February 14. By the end of the year, $60,000 of these receivables are collected. Calculate any built-in gains tax, assuming that there is sufficient taxable income.

Accepted Answer

A)  $0
B)  $10,000
C)  $21,000
D)  $35,000
E)  Some other amountF) B) and C)
G) B) and D)

Question 13

Samantha owned 1,000 shares in Evita, Inc., an S corporation, that uses the calendar year. On October 11, Samantha sells all of her Evita stock. Her stock basis at the beginning of the tax year was $60,000. Evita's ordinary income for the year was $22,000, and she receives a distribution of $35,000 on May 3rd. Her stock basis at the time of the sale is:

Accepted Answer

A)  $117,000.
B)  $82,000.
C)  $60,000.
D)  $47,000.E) A) and B)
F) A) and C)

Question 14

Non-separately computed loss ____________________ a S shareholder's stock basis.

Accepted Answer

The answer of Non-separately computed loss ____________________ a S shareholder's...

Question 15

Liabilities affect the owner's basis differently in an S corporation than they do in a partnership.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

The answer of Tax-exempt income is listed on Schedule ____________________and...

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  A Roth IRA.
B)  Partnership.
C)  A non-U.S. corporation.
D)  A nonqualifying trust.
E)  None of the above can own stock.F) None of the above
G) A) and C)

Question 19

If a resident alien shareholder moves outside the U.S., the S election is terminated.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 15: S Corporations

Most IRAs cannot own stock in an S corporation.

Correct Answer
verified

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

Correct Answer
verified

A cash basis calendar year C corporation reports $100,000 of accounts receivable on the date of its conversion to S status on February 14. By the end of the year, $60,000 of these receivables are collected. Calculate any built-in gains tax, assuming that there is sufficient taxable income.

Correct Answer
verified

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

Correct Answer
verified

Any distribution made by an S corporation during a tax year is taken into account before accounting for the year's losses.

Correct Answer
verified

Liabilities affect the owner's basis differently in an S corporation than they do in a partnership.

Correct Answer
verified

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

Correct Answer
verified

If an S corporation's beginning balance in OAA is zero, and the following transactions occur, what is the ending OAA balance?

Correct Answer
verified

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

Correct Answer
verified

Non-separately computed loss ____________________ a S shareholder's stock basis.

Correct Answer
verified

An S corporation must possess which of the following characteristics?

Correct Answer
verified

You are given the following facts about a solely owned S corporation. What is the shareholder's ending stock basis?

Correct Answer
verified

You are given the following facts about a 50% owner of an S corporation. Compute her ending stock basis.

Correct Answer
verified

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

Which item has no effect on an S corporation's AAA?

Correct Answer
verified

A per-day, per-share allocation of flow-through S corporation items must be used, unless the shareholder disposes of the entire interest in the entity.

Correct Answer
verified

If a resident alien shareholder moves outside the U.S., the S election is terminated.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Gene Grams is a 45% owner of a calendar year S corporation during the tax year. His beginning stock basis is $230,000, and the S corporation reports the following items. Calculate Grams's stock basis at year-end.

Correct Answer
verified

Exam 15: S Corporations

Most IRAs cannot own stock in an S corporation.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A cash basis calendar year C corporation reports $100,000 of accounts receivable on the date of its conversion to S status on February 14. By the end of the year, $60,000 of these receivables are collected. Calculate any built-in gains tax, assuming that there is sufficient taxable income.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Any distribution made by an S corporation during a tax year is taken into account before accounting for the year's losses.

Correct AnswerverifiedShow Answer

Liabilities affect the owner's basis differently in an S corporation than they do in a partnership.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If an S corporation's beginning balance in OAA is zero, and the following transactions occur, what is the ending OAA balance? ​

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Non-separately computed loss ____________________ a S shareholder's stock basis.

Correct AnswerverifiedShow Answer

An S corporation must possess which of the following characteristics?

Correct AnswerverifiedShow Answer

You are given the following facts about a solely owned S corporation. What is the shareholder's ending stock basis? ​

Correct AnswerverifiedShow Answer

You are given the following facts about a 50% owner of an S corporation. Compute her ending stock basis. ​

Correct AnswerverifiedShow 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

Which item has no effect on an S corporation's AAA?

Correct AnswerverifiedShow Answer

A per-day, per-share allocation of flow-through S corporation items must be used, unless the shareholder disposes of the entire interest in the entity.

Correct AnswerverifiedShow Answer

If a resident alien shareholder moves outside the U.S., the S election is terminated.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Gene Grams is a 45% owner of a calendar year S corporation during the tax year. His beginning stock basis is $230,000, and the S corporation reports the following items. ​ Calculate Grams's stock basis at year-end.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

If an S corporation's beginning balance in OAA is zero, and the following transactions occur, what is the ending OAA balance?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

You are given the following facts about a solely owned S corporation. What is the shareholder's ending stock basis?

Correct Answer
verified

You are given the following facts about a 50% owner of an S corporation. Compute her ending stock basis.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Gene Grams is a 45% owner of a calendar year S corporation during the tax year. His beginning stock basis is $230,000, and the S corporation reports the following items. Calculate Grams's stock basis at year-end.

Correct Answer
verified