Question 1

If any entity electing S status is currently a C corporation, NOL carryovers from prior years ____________________ be used in an S corporation year.

Accepted Answer

The answer of If any entity electing S status is...

Question 2

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) B) and D)
F) A) and D)

Question 3

Realized gain is recognized by an S corporation on its distribution of ____________________ property.

Accepted Answer

The answer of Realized gain is recognized by an S...

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

step-down, avoided

Question 6

Depreciation recapture income is a Schedule K item on the Form 1120S.

Accepted Answer

A) True 
 B)False

Question 7

The Section 179 expense deduction is a Schedule K item on the Form 1120S.

Accepted Answer

A) True 
 B)False

Question 8

Depreciation recapture income is a ____________________ computed amount.

Accepted Answer

nonseparately

Question 9

An estate may be a shareholder of an S corporation.

Accepted Answer

A) True 
 B)False

Question 10

Where the S corporation rules are silent, C corporation provisions apply.

Accepted Answer

A) True 
 B)False

Question 11

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) All of the above
G) None of the above E

Question 12

An S corporation is limited to a theoretical maximum of ____________________ shareholders.

Accepted Answer

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

Question 13

Most limited liability partnerships can own stock in an S corporation.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Shareholders owning a(n) ____________________ of shares (voting and nonvoting) may ____________________ revoke an election.

Accepted Answer

majority, ...

Question 16

An S corporation shareholder's stock basis includes his or her direct investments plus a ratable share of any corporate liabilities.

Accepted Answer

A) True 
 B)False

Question 17

An S shareholder's stock basis can be reduced below zero.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Fred is the sole shareholder of an S corporation in Fort Deposit, Alabama. At a time when his stock basis is $20,000, the corporation distributes appreciated property worth $100,000 (basis of $20,000) . Fred's taxable gain is:

Accepted Answer

A)  $0.
B)  $10,000.
C)  $80,000.
D)  $100,000.
E)  None of the above.F) B) and E)
G) A) and B)

Exam 15: S Corporations

If any entity electing S status is currently a C corporation, NOL carryovers from prior years ____________________ be used in an S corporation year.

Correct AnswerverifiedShow Answer

An S corporation is subject to the following tax.

Correct AnswerverifiedShow Answer

Realized gain is recognized by an S corporation on its distribution of ____________________ property.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct Answerverifiedstep-down, avoided

Depreciation recapture income is a Schedule K item on the Form 1120S.

Correct AnswerverifiedShow Answer

The Section 179 expense deduction is a Schedule K item on the Form 1120S.

Correct AnswerverifiedShow Answer

Depreciation recapture income is a ____________________ computed amount.

Correct Answerverifiednonseparately

An estate may be a shareholder of an S corporation.

Correct AnswerverifiedShow Answer

Where the S corporation rules are silent, C corporation provisions apply.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedE

An S corporation is limited to a theoretical maximum of ____________________ shareholders.

Correct AnswerverifiedShow Answer

Most limited liability partnerships can own stock in an S corporation.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Shareholders owning a(n) ____________________ of shares (voting and nonvoting) may ____________________ revoke an election.

Correct Answerverifiedmajority, ...View AnswerShow Answer

An S corporation shareholder's stock basis includes his or her direct investments plus a ratable share of any corporate liabilities.

Correct AnswerverifiedShow Answer

An S shareholder's stock basis can be reduced below zero.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Fred is the sole shareholder of an S corporation in Fort Deposit, Alabama. At a time when his stock basis is $20,000, the corporation distributes appreciated property worth $100,000 (basis of $20,000) . Fred's taxable gain is:

Correct AnswerverifiedShow Answer

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

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step-down, avoided

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nonseparately

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E

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Shareholders owning a(n) of shares (voting and nonvoting) may revoke an election.

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majority, ...
View Answer

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