Question 1

Explain the OAA concept.

Accepted Answer

S corporations report changes in the AAA...

Question 2

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?

Accepted Answer

A)   $0
B)   $13,562
C)   $16,438
D)   $32,877E) A) and B)
F) A) and C)

Question 3

The corporate-level tax on recognized built-in gains applies in 2015 when an S corporation disposes of an asset in a taxable disposition within ten years after the date on which the S election took effect.

Accepted Answer

A) True 
 B)False

Question 4

Which, if any, of the following items decreases an S corporation's AAA?

Accepted Answer

A)   Section 1231 loss.
B)   Expenses related to tax-exempt income.
C)   Depletion in excess of basis.
D)   Distribution from earnings and profits.
E)   None of the above affects the AAA.F) A) and D)
G) C) and D)

Question 5

Depletion in excess of basis in property causes a(n) ____________________ adjustment to an S shareholder's basis.

Accepted Answer

The answer of Depletion in excess of basis in property...

Question 6

Yates Corporation elects S status, effective for calendar year 2015. Yates' only asset has a basis of $50,200 and a fair market value of $110,400 as of January 1, 2015. The asset is sold at the end of 2015 for $130,800. What amount must Mark Farris, a 60% owner and subject to a 15% income tax rate, pay, if any?

Accepted Answer

A)   $5,358
B)   $12,642
C)   $21,070
D)   $35,718E) None of the above
F) All of the above

Question 7

Arizona is a(n) ____________________ property state for purposes of the S corporation requirements.

Accepted Answer

The answer of Arizona is a(n) ____________________ property state for...

Question 8

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

Accepted Answer

A)   A partnership.
B)   A nonresident alien.
C)   A voting trust.
D)   The estate of a deceased shareholder.E) A) and B)
F) A) and C)

Question 9

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

Accepted Answer

A)   Section 1244 stock.
B)   "Partial liquidation" stock redemption.
C)   Tax-free "A" reorganization.
D)   Section 1202 capital gain exclusion.E) A) and B)
F) A) and C)

Question 10

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

Accepted Answer

A)   Tax-exempt interest income.
B)   Section 1231 gain.
C)   Section 179 depreciation deduction.
D)   Depreciation recapture income.
E)   All of the above appear on Schedule K.F) B) and E)
G) D) and E)

Question 11

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 12

An S corporation is subject to the following tax.

Accepted Answer

A)   Corporate income tax (§ 11) .
B)   Built-in gains tax.
C)   Alternative minimum tax.
D)   None of the above apply to S corporations.E) None of the above
F) B) and D)

Question 13

NOL carryovers from C years can be used in an S corporation year against ordinary income.

Accepted Answer

A) True 
 B)False

Question 14

Which statement is incorrect with respect to an S shareholder's consent?

Accepted Answer

A)   A consent extension is available only if Form 2553 is filed on a timely basis, reasonable cause is given, and the interests of the government are not jeopardized.
B)   Both husband and wife must consent if one owns the stock as community property.
C)   An S election requires a consent from all of the S corporation's shareholders.
D)   A consent must be in writing.
E)   None of the above statements is incorrect.F) None of the above
G) All of the above

Question 15

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

Accepted Answer

The answer of An S corporation's separately stated items generally...

Question 16

The maximum number of actual shareholders in an S corporation is:

Accepted Answer

A)   75.
B)   100.
C)   200.
D)   Some other number.
E)   Indeterminable.F) B) and E)
G) None of the above

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

Towne, Inc., a calendar year S corporation, holds AAA of $627,050 at the beginning of 2015. During the year, the following items occur.  
​
Calculate Towne's ending AAA balance.

Accepted Answer

The answer of Towne, Inc., a calendar year S corporation,...

Question 19

When an S corporation liquidates, which of its tax attributes disappear?

Accepted Answer

A)   AAA.
B)   AEP.
C)   Suspended losses.
D)   All of the above items disappear.E) C) and D)
F) A) and B)

Question 20

Which statement is correct with respect to filing an S election?

Accepted Answer

A)   Form 2553 must be filed.
B)   All shareholders must consent.
C)   The election may be filed in the previous year.
D)   An extension of time is available for filing Form 2553.
E)   All of the above statements are correct.F) A) and B)
G) A) and C)

Exam 12: S Corporations

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

Correct Answer
verified

When an S corporation liquidates, which of its tax attributes disappear?

Correct Answer
verified

Arizona is a(n) ____________________ property state for purposes of the S corporation requirements.

Correct Answer
verified

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

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

Which statement is correct with respect to filing an S election?

Correct Answer
verified

Towne, Inc., a calendar year S corporation, holds AAA of $627,050 at the beginning of 2015. During the year, the following items occur. Calculate Towne's ending AAA balance.

Correct Answer
verified

Which statement is incorrect with respect to an S shareholder's consent?

Correct Answer
verified

An S corporation is subject to the following tax.

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

Correct Answer
verified

Explain the OAA concept.

Correct Answer
verified
S corporations report changes in the AAA...
View Answer

The corporate-level tax on recognized built-in gains applies in 2015 when an S corporation disposes of an asset in a taxable disposition within ten years after the date on which the S election took effect.

Correct Answer
verified

Depletion in excess of basis in property causes a(n) ____________________ adjustment to an S shareholder's basis.

Correct Answer
verified

NOL carryovers from C years can be used in an S corporation year against ordinary income.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

The maximum number of actual shareholders in an S corporation is:

Correct Answer
verified

Which, if any, of the following items decreases an S corporation's AAA?

Correct Answer
verified

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

Correct Answer
verified

Exam 12: S Corporations

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

Correct AnswerverifiedShow Answer

When an S corporation liquidates, which of its tax attributes disappear?

Correct AnswerverifiedShow Answer

Arizona is a(n) ____________________ property state for purposes of the S corporation requirements.

Correct AnswerverifiedShow Answer

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

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

Which statement is correct with respect to filing an S election?

Correct AnswerverifiedShow Answer

Towne, Inc., a calendar year S corporation, holds AAA of $627,050 at the beginning of 2015. During the year, the following items occur. ​ Calculate Towne's ending AAA balance.

Correct AnswerverifiedShow Answer

Which statement is incorrect with respect to an S shareholder's consent?

Correct AnswerverifiedShow Answer

An S corporation is subject to the following tax.

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

Correct AnswerverifiedShow Answer

Explain the OAA concept.

Correct AnswerverifiedS corporations report changes in the AAA...View AnswerShow Answer

The corporate-level tax on recognized built-in gains applies in 2015 when an S corporation disposes of an asset in a taxable disposition within ten years after the date on which the S election took effect.

Correct AnswerverifiedShow Answer

Depletion in excess of basis in property causes a(n) ____________________ adjustment to an S shareholder's basis.

Correct AnswerverifiedShow Answer

NOL carryovers from C years can be used in an S corporation year against ordinary income.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The maximum number of actual shareholders in an S corporation is:

Correct AnswerverifiedShow Answer

Which, if any, of the following items decreases an S corporation's AAA?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Towne, Inc., a calendar year S corporation, holds AAA of $627,050 at the beginning of 2015. During the year, the following items occur. Calculate Towne's ending AAA balance.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
S corporations report changes in the AAA...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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