Question 1

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

Accepted Answer

The § 199 deduction is determined at the...

Question 2

An S corporation must own ____________________% of a subsidiary's stock in order to elect to treat the subsidiary as a QSSS.

Accepted Answer

The answer of An S corporation must own ____________________% of...

Question 3

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

Accepted Answer

A)   Intangible drilling costs.
B)   Foreign loss.
C)   Recovery of a tax benefit.
D)   Interest expense.
E)   All of the above appear on Schedule K.F) B) and D)
G) A) and B)

Question 4

A former spouse is treated as being in the same family as the individual to whom he or she was married.

Accepted Answer

A) True 
 B)False

Question 5

A limited liability company can own S corporation stock.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)   An S election requires a consent from all of the S corporation's shareholders.
B)   Both husband and wife must consent if one owns the stock as community property.
C)   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.
D)   A consent must be in writing.
E)   None of the above statements is incorrect.F) A) and C)
G) C) and D)

Question 7

An S corporation is limited to ____________________ (how many?)shareholders.

Accepted Answer

The answer of An S corporation is limited to ____________________...

Question 8

Which is ineligible to be an S shareholder?

Accepted Answer

A)   Individual.
B)   Estate.
C)   Partnership.
D)   Spouse of a nonresident alien (common law state) .
E)   None of the above.F) A) and D)
G) C) and D)

Question 9

S corporation status avoids the ____________________ taxation and ____________________ limitations inherent in the regular corporate form.
or

Accepted Answer

The answer of S corporation status avoids the ____________________ taxation...

Question 10

The Schedule M-3 is the same for a C corporation and an S corporation.

Accepted Answer

A) True 
 B)False

Question 11

On January 1,2011,Zundel,Inc.,an electing S corporation,has $4,000 of AEP and a balance of $10,000 in AAA.Zundel has two shareholders,Erin and Maine,each of whom owns 500 shares of Zundel's stock.Zundel's 2011 taxable income is $5,000.Zundel distributes $6,000 to each shareholder on February 1,2011,and distributes another $3,000 to each shareholder on September 1.How is Erin taxed on this distribution?

Accepted Answer

A)   $500 dividend income.
B)   $1,000 dividend income.
C)   $1,500 dividend income.
D)   $3,000 dividend income.
E)   None of the above.F) B) and D)
G) A) and D)

Question 12

An S corporation with substantial AEP has operating revenues of $410,000,taxable interest income of $390,000,operating expenses of $260,000,and deductions attributable to the interest of $150,000.The passive income penalty tax payable,if any,is:

Accepted Answer

A)   $0.
B)   $40,923.
C)   $116,923.
D)   $136,500.
E)   None of the above.F) B) and E)
G) A) and C)

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

The answer of Bidden,Inc.,a calendar year S corporation,incurred the following...

Question 15

An item that appears in the "Other Adjustments Account" affects stock basis,but not AAA,such as tax-exempt life insurance proceeds.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The LIFO recapture tax is a variation of the passive investment income penalty tax.

Accepted Answer

A) True 
 B)False

Exam 22: S Corporations

Correct Answer
verified

A limited liability company can own S corporation stock.

Correct Answer
verified

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

Correct Answer
verified

The Schedule M-3 is the same for a C corporation and an S corporation.

Correct Answer
verified

An S corporation must own ____________________% of a subsidiary's stock in order to elect to treat the subsidiary as a QSSS.

Correct Answer
verified

The LIFO recapture tax is a variation of the passive investment income penalty tax.

Correct Answer
verified

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

Correct Answer
verified
The § 199 deduction is determined at the...
View Answer

A former spouse is treated as being in the same family as the individual to whom he or she was married.

Correct Answer
verified

An item that appears in the "Other Adjustments Account" affects stock basis,but not AAA,such as tax-exempt life insurance proceeds.

Correct Answer
verified

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

Correct Answer
verified

An S corporation is limited to ____________________ (how many?)shareholders.

Correct Answer
verified

An S corporation with substantial AEP has operating revenues of $410,000,taxable interest income of $390,000,operating expenses of $260,000,and deductions attributable to the interest of $150,000.The passive income penalty tax payable,if any,is:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

S corporation status avoids the taxation and limitations inherent in the regular corporate form. or

Correct Answer
verified

Which is ineligible to be an S shareholder?

Correct Answer
verified

Exam 22: S Corporations

Correct AnswerverifiedShow Answer

A limited liability company can own S corporation stock.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The Schedule M-3 is the same for a C corporation and an S corporation.

Correct AnswerverifiedShow Answer

An S corporation must own ____________________% of a subsidiary's stock in order to elect to treat the subsidiary as a QSSS.

Correct AnswerverifiedShow Answer

The LIFO recapture tax is a variation of the passive investment income penalty tax.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe § 199 deduction is determined at the...View AnswerShow Answer

A former spouse is treated as being in the same family as the individual to whom he or she was married.

Correct AnswerverifiedShow Answer

An item that appears in the "Other Adjustments Account" affects stock basis,but not AAA,such as tax-exempt life insurance proceeds.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An S corporation is limited to ____________________ (how many?)shareholders.

Correct AnswerverifiedShow Answer

An S corporation with substantial AEP has operating revenues of $410,000,taxable interest income of $390,000,operating expenses of $260,000,and deductions attributable to the interest of $150,000.The passive income penalty tax payable,if any,is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

S corporation status avoids the ____________________ taxation and ____________________ limitations inherent in the regular corporate form. or

Correct AnswerverifiedShow Answer

Which is ineligible to be an S shareholder?

Correct AnswerverifiedShow Answer

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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The § 199 deduction is determined at the...
View Answer

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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Correct Answer
verified

S corporation status avoids the taxation and limitations inherent in the regular corporate form. or

Correct Answer
verified

Correct Answer
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