Questions from Federal Taxation

Q: Scott Tierney owns 21% of an S corporation. He is

Scott Tierney owns 21% of an S corporation. He is confused with respect to the amounts of the corporate AAA and his stock basis. Write a memo to Scott identifying the key differences between AAA and a...

Q: Sunset Corporation, with E & P of $400,000

Sunset Corporation, with E & P of $400,000, makes a cash distribution of $120,000 to a shareholder. The shareholder’s basis in the Sunset stock is $50,000. a. Determine the tax consequences to the sha...

Q: For each of the following independent statements, indicate whether the transaction

For each of the following independent statements, indicate whether the transaction will increase (+), decrease (─), or have no effect (NE) on the basis of a shareholder’s stock in an S corporation. a....

Q: Sheila Jackson is a 50% shareholder in Washington, Inc.,

Sheila Jackson is a 50% shareholder in Washington, Inc., an S corporation. This year, Jackson’s share of the Washington loss is $100,000. Jackson reports income from several other sources. Identify at...

Q: One of your clients is considering electing S status. Texas,

One of your clients is considering electing S status. Texas, Inc., is a six year- old company with two equal shareholders, both of whom paid $30,000 for their stock. Going into 2017, Texas holds a $11...

Q: Bob Roman, the major owner of an S corporation, approaches

Bob Roman, the major owner of an S corporation, approaches you for some tax planning help. He would like to exchange some real estate in a like-kind transaction under § 1031 for real estate that may h...

Q: On March 2, 2017, the two 50% shareholders of

On March 2, 2017, the two 50% shareholders of a calendar year corporation decide to elect S status. One of the shareholders, Terry, purchased her stock from a previous shareholder (a nonresident alien...

Q: Caleb Samford calls you and says that his two-person S

Caleb Samford calls you and says that his two-person S corporation was involuntarily terminated in February 2016. He asks you if they can make a new S election now, in November 2017. Draft a memo for...

Q: Using the categories in the following legend, classify each transaction as

Using the categories in the following legend, classify each transaction as a plus (+) or minus (─) on Schedule M–2 of Form 1120S. An answer might look like one of t...

Q: Which of the following are requirements to be an S corporation?

Which of the following are requirements to be an S corporation? a. Limited to an absolute maximum of 100 shareholders. b. Has no resident alien shareholders. c. Has only one class of stock. d. May hav...