Questions from Federal Taxation

Q: One shareholder of an S corporation takes a short-term unwritten

One shareholder of an S corporation takes a short-term unwritten cash advance of $9,100 during the tax year. Would this arrangement create a second class of stock? Explain.

Q: Which of the following can be shareholders of an S corporation?

Which of the following can be shareholders of an S corporation? a. Partnership. b. Limited liability partnership. c. Corporation. d. One-member limited liability company

Q: Pursuant to a complete liquidation, Carrot Corporation distributes to its shareholders

Pursuant to a complete liquidation, Carrot Corporation distributes to its shareholders real estate held as an investment (basis of $650,000, fair market value of $880,000). a. Determine the gain or lo...

Q: Joey lives in North Carolina, a common law state. He

Joey lives in North Carolina, a common law state. He is a shareholder in an S corporation. If he marries a nonresident alien, will the S election terminate? Would your answer change if he lives in Lou...

Q: Which of these taxes may be incurred by an S corporation?

Which of these taxes may be incurred by an S corporation? a. Alternative minimum tax. b. Tax on certain built-in gains. c. Property tax assessed by the county.

Q: Mary is a shareholder in CarrollCo, a calendar year S corporation

Mary is a shareholder in CarrollCo, a calendar year S corporation. At the beginning of the year, her stock basis is $10,000, her share of the AAA is $2,000, and her share of corporate AEP is $6,000. A...

Q: On January 1, Kinney, Inc., an S corporation,

On January 1, Kinney, Inc., an S corporation, reports $4,000 of accumulated E & P and a balance of $10,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney’s...

Q: McLin, Inc., is a calendar year S corporation. Its

McLin, Inc., is a calendar year S corporation. Its AAA balance is zero. a. McLin holds $90,000 of AEP. Tobias, the sole shareholder, has an adjusted basis of $80,000 in his stock. Determine the tax as...

Q: During the year, Wheel, a calendar year S corporation in

During the year, Wheel, a calendar year S corporation in Stillwater, Oklahoma, generates the following AMT items: a positive adjustment of $66,000 for mining exploration costs, an excess depletion tax...

Q: Spence, Inc., a calendar year S corporation, generates an

Spence, Inc., a calendar year S corporation, generates an ordinary loss of $110,000 and makes a distribution of $140,000 to its sole shareholder, Storm Nelson. Nelson’s stock basis and AAA at the begi...