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Exam 22: S Corporations

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Question 41

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

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Question 42

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An estate may be a shareholder of an S corporation.

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B) False

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Question 43

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Any excess of S corporation losses or deductions over the shareholder's combined stock and debt basis is suspended until there is a subsequent stock or debt basis.

An S shareholder who dies during the S corporation tax year must report his or her share of the pro rata income (loss) items up to the date of death,on the final individual tax return.

Distribution of loss property by an S corporation to a shareholder generally should be _________________.

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?

An S shareholder's stock basis is reduced by flow-through losses before accounting for distributions.

The § 1202 exclusion of gain is not available on disposition of S corporation stock.

An S election is made on the shareholder's Form 2553.

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

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

An S election made before becoming a corporation is valid only beginning with the first 12-month tax year.

An S corporation must possess which of the following characteristics?

When loss assets are distributed by an S corporation,a shareholder's basis is equal to the asset's fair market value.

On January 2,2014,Tim loans his S corporation $10,000.By the end of 2014,Tim's stock basis is zero,and the basis in his note has been reduced to $8,000.During 2015,the company's operating income is $10,000.The company makes 2015 distributions to Tim of $8,000.Tim reports a(n) :

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?

You are a 60% owner of an S corporation.Calculate your ending stock basis,based upon these facts. Beginning stock basis $52,600 Purchases of additional stock 15,000 Insurance premiums paid (nondeductible) 3,600 Tax-exempt interest income 5,230 Payroll tax penalty 3,770 Increase in AAA 22,400 Increase in OAA 5,800

Discuss the two methods of allocating tax-related items to S corporation shareholders.

It is not beneficial for an S corporation to issue § 1244 stock.

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