Question 1

Identify which of the following statements is true.

Accepted Answer

A)   Shareholders who acquire stock in an S corporation after the election date and prior to the election's effective date must consent to the election.
B)   S corporation consent by shareholders is binding on the current tax year and all future tax years.
C)   Only shareholders who own stock on the date an S election takes effect must consent to the election.
D)   All of the above are false.E) B) and C)
F) A) and B)

Question 2

An electing S corporation has a $30,000 ordinary loss for the non-leap year. On January 1, Beverly and Sonya own equally all of the S corporation stock. On the 146th day of the year, Beverly gives her one-half of the S corporation stock to her daughter Becky. How much of the $30,000 ordinary loss is allocated to Sonya?

Accepted Answer

A)   $25,000
B)   $15,000
C)   $10,000
D)   $6,000E) B) and D)
F) A) and D)

Question 3

Robert Elk paid $100,000 for all of the single class of stock of Elkom Corporation, an electing S corporation, when incorporated in January, 2007. Elkom's operating results and dividend distribution are as follows:
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Tax Year } \
\text { Ending }
\end{array} & \begin{array} { c } 
\text { Ordinary } \
\text { Income }
\end{array} & \text { Distribution } \
\hline 2007 & ( \$ 40,000 ) & \
2008 & 60,000 & \$ 20,000 ( 9 / 30 ) \
2009 & 30,000 & \
\hline
\end{array}$$ What is Elk's basis for his Elkom stock on December 31 of 2007?

Accepted Answer

$100,000 - $40,000 + ($60,000 - $20,000)...

Exam 11: S Corporations

Correct Answer
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$100,000 - $40,000 + ($60,000 - $20,000)...
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Correct Answer
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Identify which of the following statements is true.

Correct Answer
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Exam 11: S Corporations

Correct Answerverified$100,000 - $40,000 + ($60,000 - $20,000)...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Identify which of the following statements is true.

Correct AnswerverifiedShow Answer

Correct Answer
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$100,000 - $40,000 + ($60,000 - $20,000)...
View Answer

Correct Answer
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Correct Answer
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