Questions from Federal Taxation


Q: Explain the positive and negative adjustments to the basis of an S

Explain the positive and negative adjustments to the basis of an S corporation shareholder’s stock investment and the basis of an S corporation debt owed to the shareholder.

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Q: Explain the differences between the tax treatment accorded nonliquidating property distributions made

Explain the differences between the tax treatment accorded nonliquidating property distributions made by S corporations and partnerships.

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Q: What nonliquidating distributions made by an S corporation are taxable to its

What nonliquidating distributions made by an S corporation are taxable to its shareholders? Taxfree to its shareholders?

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Q: What are the advantages and disadvantages to the partnership and its partners

What are the advantages and disadvantages to the partnership and its partners when a partnership termination is caused by a sale of at least a 50% capital and profits interest?

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Q: What is an accumulated adjustments account (AAA)? What income,

What is an accumulated adjustments account (AAA)? What income, gain, loss, and deduction items do not affect this account assuming the S corporation has an accumulated E&P balance?

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Q: What taxes must an S corporation prepay by making quarterly estimated tax

What taxes must an S corporation prepay by making quarterly estimated tax payments? Can a shareholder owning S corporation stock use the corporation’s estimated tax payments to reduce the amount of hi...

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Q: Williams Corporation has operated as a C corporation for the last seven

Williams Corporation has operated as a C corporation for the last seven years. The corporation has assets with a $450,000 adjusted basis and an $800,000 FMV. Liabilities amount to $100,000. Dan Willia...

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Q: Peter owns 50% of Air South Corporation, an air charter

Peter owns 50% of Air South Corporation, an air charter service. His S corporation stock basis at beginning of the year is $100,000. Air South has not done well this year and will report an ordinary l...

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Q: Glacier Smokeries has been an S corporation since its inception six years

Glacier Smokeries has been an S corporation since its inception six years ago. On January 1 of the current year, the corporation’s two equal shareholders, Adam and Rodney, had adjusted bases of $175,0...

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Q: Jennelle and Paula are equal partners in the J&P Manufacturing

Jennelle and Paula are equal partners in the J&P Manufacturing Partnership. The partnership will form J&P Corporation by exchanging the assets and liabilities of the J&P Manufacturing Partnership for...

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