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Exam 12: S: Corporations

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Question 71

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

A) True
B) False

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Question 72

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Passive investment income includes net capital gains from the sale of stocks and securities.

A) True
B) False

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Question 73

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

Estela,Inc. ,a calendar year S corporation,incurred the following items in 2012. Calculate Estela's nonseparately computed income.

Since loss property receives a ____________________ in basis without any loss recognition,S corporation distributions of loss property should be ____________________.

An S shareholder's basis is not decreased by distributions treated as being paid from AAA.

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

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

Claude Bergeron sold 1,000 shares of Ditta,Inc. ,an S corporation,for $12,000.He had owned the stock for three years and had a stock basis of $111,000 in the shares.Claude is single,and he is the original owner of the § 1244 stock shares.Calculate the appropriate tax treatment.

During 2012,Dana Rippel,the sole shareholder of a calendar year S corporation,received a distribution of $16,000.On December 31,2011,her stock basis was $4,000.The corporation earned $11,000 ordinary income during the year.It has no accumulated E & P.Which statement is correct?

An S corporation does not recognize a loss when distributing assets that are worth less than their basis.

Which tax provision does not apply to an S corporation?

Bidden,Inc. ,a calendar year S corporation,incurred the following items. Calculate Bidden's nonseparately computed income.

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

Several individuals acquire assets on behalf of Skip Corporation on May 28,2012,purchased assets on June 3,2012,and began business on June 11,2012.They subscribe to shares of stock,file articles of incorporation for Skip,and become shareholders on June 21,2012.The S election must be filed no later than 2 1/2 months after:

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

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.

An S shareholder's basis is increased by stock purchases and capital contributions.

The maximum number of shareholders in an S corporation is:

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