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Exam 12: S: Corporations

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Question 31

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S corporation status allows shareholders to realize tax benefits from corporate losses ____________________.

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Question 32

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During 2012,Oxen Corporation incurs the following transactions. Oxen maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder,Megan.As a result,Megan must recognize:

A) Ordinary income of $103,000.
B) Ordinary income of $103,000 and long-term capital gain of $5,000.
C) Ordinary income of $103,000,long-term capital gain of $10,000,and $4,000 short-term capital loss.
D) Ordinary income of $109,000.

E) B) and C)
F) All of the above

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Question 33

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Shareholders may deduct losses in excess of their basis in S corporation stock when a shareholder holds a loan basis of zero.

An S corporation can be a shareholder in another corporation.

Four unrelated individuals acquire assets on behalf of Jump Corporation on May 21,2012,purchased assets on June 5,2012,and begin doing business on June 15,2012.They subscribe to shares of stock,file articles of incorporation for Jump,and become shareholders on July 23,2012.The S election must be filed no later than 2 1/2 months after:

The alternative minimum tax applies to an S corporation.

Tax-exempt income is a Schedule K item for an S corporation.

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.

Which type of distribution from an S corporation is taxed at the 0/15% Federal income tax rate?

Consent to an S election must be in ____________________,and it must be generally filed by the election ____________________.

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

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

The Section 179 expense deduction is a Schedule K item.

Individuals Adam and Bonnie form an S corporation,with Adam contributing cash of $100,000 for a 50% interest and Bonnie contributing appreciated ordinary income property with an adjusted basis of $20,000 and a fair market value of $100,000.

You are a 60% owner of an S corporation.Calculate your ending stock basis,based upon these facts.

Meeting the definition of a small business corporation is a ____________________ requirement for maintaining the S status.

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

Which statement is incorrect?

Compare the distribution of property rules for an S corporation with the corresponding partnership rules.

Only 80% of the shareholders must consent to an S election.