Questions from Federal Taxation

Q: Harry and Rita formed Alpha Corporation as an S corporation, with

Harry and Rita formed Alpha Corporation as an S corporation, with each shareholder contributing $10,000 in exchange for stock. In addition, Rita loaned the corporation $7,000, and the corporation borr...

Q: Stein Corporation, an S corporation, has 400 shares of stock

Stein Corporation, an S corporation, has 400 shares of stock outstanding. Chuck and Linda own an equal number of these shares, and both actively participate in Stein’s business. Chuck and Linda each c...

Q: Tina, a single taxpayer, owns 100% of Rocket Corporation

Tina, a single taxpayer, owns 100% of Rocket Corporation, an S corporation. She has an $80,000 stock basis for her investment on January 1 of the current year (Year 1). During the first 11 months of Y...

Q: For each of the following items, indicate whether the item will

For each of the following items, indicate whether the item will increase, decrease, or cause no change in the S corporation’s ordinary income (loss), AAA, and in the shareholder’s stock basis. The cor...

Q: Tammy organized Sweets Corporation in January of the current year, and

Tammy organized Sweets Corporation in January of the current year, and the corporation immediately elected to be an S corporation. Tammy, who contributed $40,000 in cash to start the business, owns 10...

Q: George and Martha formed Washington Corporation as an S corporation several years

George and Martha formed Washington Corporation as an S corporation several years ago. George and Martha each have a 50% interest in the corporation. At the beginning of the current year, their stock...

Q: What is an electing large partnership? What are the advantages to

What is an electing large partnership? What are the advantages to the partnership of electing to be taxed under the electing large partnership rules?

Q: Curt incorporates Vogel Corporation on January 15 of the current year.

Curt incorporates Vogel Corporation on January 15 of the current year. Curt makes a $70,000 capital contribution including land having a $12,000 FMV, and Vogel makes a timely S election for this year....

Q: Hal organized Stable Corporation five years ago and has continued to own

Hal organized Stable Corporation five years ago and has continued to own all its stock. The corporation made an S election one year after its incorporation. At the beginning of the current year, Stabl...

Q: Sigma Corporation, an S corporation with one shareholder, incurred the

Sigma Corporation, an S corporation with one shareholder, incurred the following items Year 1 and Year 2: At the beginning of Year 1, the corporation had AAA and OAA balances of zero and accumulated...