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Question;1377. CHAPTER;12?S CORPORATIONS Question PR #1;Janet Wang is a 50% owner of a calendar year S corporation. During 2011, the S;corporation has ordinary income of $175,000, short-term capital gain of;$94,000, tax-exempt income of $22,000, and a charitable contribution of $18,000.;What S corporation items must Janet report in 2011?;1378. CHAPTER;12?S CORPORATIONS Question PR #2;Simmen, Inc., a calendar year S corporation, incurred the following items in;2011.;Municipal;bond interest;$ 6,200;Sales;122,000;? 1245 gain;11,000;Long-term;capital gain;16,000;Cost of;goods sold;39,000;Administrative;expenses;15,000;Depreciation;expenses;18,000;Charitable;contribution;12,000;Calculate Simmen?s nonseparately computed income.;1379. CHAPTER;12?S CORPORATIONS Question PR #3;Bidden, Inc., a calendar year S corporation, incurred the following items.;Sales;$130,000;Depreciation;recapture income;12,000;Short-term;capital gain;30,000;Cost of;goods sold;(42,000);Municipal;bond interest income;7,000;Administrative;expenses;(15,000);Depreciation;expense;(17,000);Charitable;contributions;(14,000);Calculate Bidden?s nonseparately computed income.;1380. CHAPTER 12?S;CORPORATIONS Question PR #4;Gene Grams is a 45% owner of a calendar year S corporation during 2011. His;beginning stock basis is $230,000, and the S corporation reports the following;items.;Ordinary;income;$64,000;Short-term;capital gain;16,000;? 1231 loss;6,000;Tax-exempt;interest income;5,000;Calculate Grams? stock basis at year-end.;1381. CHAPTER;12?S CORPORATIONS Question PR #5;During 2011, Ms. Rasic, the sole shareholder of a calendar year S corporation;received a distribution of $16,000. On December 31, 2010, Ms. Rasic?s stock;basis was $4,000. The corporation earned $11,000 ordinary income during the;year. Calculate the amount and type of income Ms. Rasic recognizes in 2011;assuming there is no C corporation AEP.;1382. CHAPTER;12?S CORPORATIONS Question PR #6;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.;a.;Determine;Bonnie?s initial basis in her stock, assuming that she receives a 50%;interest.;b.;The S;corporation sells the property for $120,000. Determine Adam?s and Bonnie?s;stock basis after the sale.;c.;Determine;Adam?s and Bonnie?s gain or loss if the company is liquidated.;1383. CHAPTER;12?S CORPORATIONS Question PR #7;You are a 60% owner of an S corporation. Calculate your ending stock basis;based upon these facts.;Beginning;stock basis;$42,570;Stock;purchases;15,000;Insurance;premiums paid (nondeductible);3,600;Tax-exempt;interest income;5,230;Payroll tax;penalty;3,770;Increase in;AAA;22,400;Increase in;OAA;5,800;1384. CHAPTER;12?S CORPORATIONS Question PR #8;On December 31, 2010, Erica Sumners owns one share of an S corporation?s 10;outstanding shares of stock. The basis of Erica?s share is $300. During 2011;the S corporation has no income or deductions, but incurs a loss of $3,650.;Determine the amount of the loss allocated to Erica, and calculate her stock;basis at the end of 2011.;1385. CHAPTER;12?S CORPORATIONS Question PR #9;Blue Corporation elects S status effective for tax year 2011. As of January 1;2011, Blue?s assets were appraised as follows.;Adjusted Basis;Fair Market Value;Cash;Accounts receivable;Inventory (FIFO);Investment in land;Building;Goodwill;$ 16,010;?0?;70,000;110,000;220,000;?0?;$ 16,010;55,400;90,000;195,000;275,000;93,000;In each of the following situations, calculate any built-in gains tax, assuming;that the highest corporate tax rate is 35%. C corporation taxable income would;have been $100,000.;a.;During 2011;Blue collects $48,000 of the accounts receivable and sells 80% of the;inventory for $99,000.;b.;In 2012;Blue sells the land held for investment for $203,000.;c.;In 2013, the;building is sold for $270,000.;1386. CHAPTER;12?S CORPORATIONS Question PR #10;Pepper, Inc., an S corporation in Norfolk, VA, generates revenues of $400,000;taxable interest of $380,000, operating expenses of $250,000, and deductions;attributable to the interest income of $140,000. Calculate any passive;investment income penalty tax payable by Pepper.;1387. CHAPTER;12?S CORPORATIONS Question ES #1;What are the characteristics of an S corporation?s straight debt?;1388. CHAPTER;12?S CORPORATIONS Question ES #2;Explain how family members are treated for purposes of the number of;shareholders requirement concerning S corporation status.;1389. CHAPTER;12?S CORPORATIONS Question ES #3;List some of the separately stated items listed on Schedule K of the Form;1120S.;1390. CHAPTER;12?S CORPORATIONS Question ES #4;Discuss the two methods of allocating S items to shareholders..;1391. CHAPTER;12?S CORPORATIONS Question ES #5;Compare the distribution of property rules for an S corporation with the;corresponding partnership rules.;1392. CHAPTER;12?S CORPORATIONS Question ES #6;How may an S corporation manage its liability for the built-in gains tax?.;1393. CHAPTER;12?S CORPORATIONS Question ES #7;Explain how the domestic production activities deduction is used for an S;corporation.

 

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