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Exam 22: S: Corporations

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Question 61

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

A) Cash.
B) Investment portfolio.
C) Real estate.
D) Notes receivable.

E) B) and C)
F) A) and D)

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Question 62

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

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Question 63

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Depreciation recapture income is a ____________________ computed amount.

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

An S election made before becoming a corporation is valid only beginning with the first 22-month tax year.

Post-termination distributions by a former S corporation that are charged against ____________________ do not get tax-free treatment.

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

The corporate ____________________ ____________________ tax is avoided in an S corporation.

Depreciation recapture income is a Schedule K item.

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

On January 2, 2011, Tim loans his S corporation $10,000.By the end of 2011, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000.During 2012, the company's operating income is $10,000.The company also makes distributions to Tim of $8,000.Tim reports a(n) :

Identify a disadvantage of being an S corporation.

Explain how the domestic production activities deduction is used for an S corporation.

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

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?

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

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

Trent Huynh is a 45% owner of a calendar year S corporation during 2012.His beginning stock basis is $292,000, and the S corporation reports the following items. Calculate Huynh's stock basis at year-end.

Charitable contributions are subject to a 10% limitation at the S corporation level.

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