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Question;1237. #1;The alternative minimum tax may apply to an S corporation.;a.;True;b. False;1238. #2;The alternative minimum tax does not;apply to an S corporation.;a.;True;b. False;1239. #3;Liabilities affect owners? basis differently between a partnership and an S;corporation.;a.;True;b. False;1240. #4;An S election allows shareholders to realize tax benefits from losses;immediately.;a.;True;b. False;1241. #5;An NOL from a Subchapter C year can be used to offset operating income in an S;corporation year.;a.;True;b. False;1242. #6;An estate can be an S corporation shareholder.;a.;True;b. False;1243. #7;A maximum dollar sales limitation applies to an S corporation.;a.;True;b. False;1244. #8;Differences in distribution or liquidation rights among shareholders do not create a second class of stock.;a.;True;b. False;1245. #9;Straight debt issued in an S corporation year will not be treated as a second class of stock and will not disqualify;an S election.;a.;True;b. False;1246. #10;A widower and his spouse?s estate are treated as one shareholder.;a.;True;b. False;1247. #11;A former spouse is treated as being in the same family as the individual to;whom he or she was married.;a.;True;b. False;1248. #12;A limited liability company can own S corporation stock.;a.;True;b. False;1249. #13;An S corporation can be a partner in a partnership.;a.;True;b. False;1250. #14;Most Roth IRAs can own S corporation stock.;a.;True;b. False;1251. #15;For S corporation status to apply in the current tax year, the election must be;filed during the grace period before the 15th day of the third month of the;current year.;a.;True;b. False;1252. #16;A limited liability company can make an S election.;a.;True;b. False;1253. #17;A voluntary revocation of an S election requires only a consent of shareholders;owning a majority of shares on the day that the revocation is made.;a.;True;b. False;1254. #18;A corporation can revoke its S status prospectively.;a.;True;b. False;1255. #19;There is no limit on the amount of passive investment income that an S;corporation can receive during the year.;a.;True;b. False;1256. #20;Rents always are considered to be passive investment income in S status.;a.;True;b. False;1257. #21;Tax-exempt income is a Schedule K item for an S corporation.;a.;True;b. False;1258. #22;An S corporation?s separately stated items are identical to those separately;stated by partnerships.;a.;True;b. False;1259. #23;An S corporation can take advantage of the dividends received deduction.;a.;True;b. False;1260. #24;The Section 179 expense deduction is a Schedule K item.;a.;True;b. False;1261. #25;Depreciation recapture income is a Schedule K item.;a.;True;b. False;1262. #26;A per-day, per-share allocation of flow-through S corporation items must be;used, unless the shareholder disposes of the entire interest in the entity.;a.;True;b. False;1263. #27;Any distribution of cash or property by a corporation that does not exceed the;balance of AAA with respect to the stock during a post-termination transition;period of approximately one year is applied against and reduces the adjusted;basis of the stock.;a.;True;b. False;1264. #28;All tax preference items flow through the S corporation, to be included in the;shareholders? AMT calculations.;a.;True;b. False;1265. #29;An S shareholder who dies during the corporate tax year must report his or her;share of the pro rata income (or loss) up to the date of death on the final;individual tax return.;a.;True;b. False;1266. #30;A capital loss allocated to a shareholder always reduces the other adjustments account.;a.;True;b. False;1267. #31;Tax-exempt income is not separately stated on Schedule K of Form 1120S.;a.;True;b. False;1268. #32;A distribution from OAA is taxable.;a.;True;b. False;1269. #33;An item that appears in the ?Other Adjustments Account? affects stock basis;but not AAA, such as tax-exempt life insurance proceeds.;a.;True;b. False;1270. #34;An S corporation that has total assets of at least $5 million on Schedule L at;the end of the tax year must file a Schedule M-3.;a.;True;b. False;1271. #35;The Schedule M-3 is the same for a C corporation and an S corporation.;a.;True;b. False;1272. #36;A distribution of cash or other property by an S corporation to shareholders;that does not exceed the balance of AAA during a one-year period following an S;election termination receives special capital gain treatment.;a.;True;b. False;1273. #37;Post-termination distributions that are charged against OAA do not get tax-free treatment.;a.;True;b. False;1274. #38;An S corporation does not recognize a loss when distributing assets that are;worth less than their basis.;a.;True;b. False;1275. #39;When loss assets are distributed by an S corporation, a shareholder?s basis is;equal to the asset?s fair market value.;a.;True;b. False;1276. #40;An S shareholder?s basis is increased by stock purchases and capital;contributions.;a.;True;b. False;1277. #41;An S shareholder?s basis is decreased by distributions treated as being paid;from AAA.;a.;True;b. False;1278. #42;Form 1120S provides a shareholder?s computation of his or her stock basis.;a.;True;b. False;1279. #43;An S corporation shareholder?s basis includes his or her direct investments;plus a ratable share of any;corporate liabilities.;a.;True;b. False;1280. #44;An S shareholder?s basis in his or her stock can be reduced below zero.;a.;True;b. False;1281. #45;Pass-through S corporation losses can reduce the basis in the shareholder?s;loan to the entity, but distributions do not.;a.;True;b. False;1282. #46;An S shareholder?s stock basis is reduced by flow-through losses before accounting for distributions.;a.;True;b. False;1283. #47;An S shareholder?s stock basis includes a ratable share of any S corporation;liabilities.;a.;True;b. False;1284. #48;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.;a.;True;b. False;1285. #49;An S corporation is entitled to a deduction for its NOL carryovers.;a.;True;b. False;1286. #50;Any distribution made by an S corporation during a tax year is taken into;account before accounting for the year?s losses.;a.;True;b. False;1287. #51;The carryover period for the NOLs of a C corporation continues to run during S;corporation years.;a.;True;b. False;1288. #52;Any losses that are suspended under the at-risk rules are carried forward and;are available during an S corporation?s post-termination period.;a.;True;b. False;1289. #53;The ? 1374 tax is a corporate-level tax on any built-in gain recognized in 2011;when an S corporation disposes of an asset in a taxable disposition within 7;tax years after the date on which the S election took effect.;a.;True;b. False;1290. #54;The LIFO recapture tax is a variation of the passive investment income penalty;tax.;a.;True;b. False;1291. #55;Passive investment income includes net capital gains from the sale of stocks;and securities.;a.;True;b. False;1292. #56;Compensation for services rendered to an S corporation is subject to FICA;taxes.;a.;True;b. False;1293. #57;The ? 1202 exclusion of gain is available on disposition of S corporation;stock.;a.;True;b. False;1294. #58;It is beneficial for an S corporation to issue ? 1244 stock.;a.;True;b. False


Paper#59240 | Written in 18-Jul-2015

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