Questions from General Taxation

Q: Maul, Inc., a calendar year S corporation, incurred the

Maul, Inc., a calendar year S corporation, incurred the following items. Tax-exempt interest income ……………………………………. $ 7,000 Sales ……………………………………………………………………. 140,000 Depreciation recapture income ………...

Q: Zebra, Inc., a calendar year S corporation, incurred the

Zebra, Inc., a calendar year S corporation, incurred the following items this year. Sammy is a 40% Zebra shareholder throughout the year. Operating income …………………………………………………$100,000 Cost of goods so...

Q: Kesha, a sole proprietor, is engaged in a cash basis

Kesha, a sole proprietor, is engaged in a cash basis service business. In the current year, she incorporates the business to form Kiwi Corporation. She transfers assets with a basis of $500,000 (fair...

Q: McLin, Inc., a calendar year S corporation, holds $

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

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...

Q: Sweetie, a calendar year S corporation, reports an ordinary loss

Sweetie, a calendar year S corporation, reports an ordinary loss of $80,000 and a capital loss of $20,000. Mei Freiberg owns 30% of the corporate stock and holds a $24,000 basis in the stock. Determin...

Q: Valence Corporation’s Form 1120S shows ordinary income of $88,000

Valence Corporation’s Form 1120S shows ordinary income of $88,000 for the year. Daniel owns 40% of the Valence stock throughout the year. The following information is obtained from the corporate recor...

Q: Cougar, Inc., is a calendar year S corporation. Cougar’s

Cougar, Inc., is a calendar year S corporation. Cougar’s Form 1120S shows non separately stated ordinary income of $80,000 for the year. Johnny owns 40% of the Cougar stock throughout the year. The fo...

Q: One of your clients, Texas, Inc., is considering

One of your clients, Texas, Inc., is considering electing S status. Both of Texas’s equal shareholders paid $30,000 for their stock. As of the beginning of 2013, Texas’s Subchapter C NOL carryforward...

Q: Selma operates a contractor’s supply store. She maintains her books using

Selma operates a contractor’s supply store. She maintains her books using the cash method. At the end of the year, her accountant computes her accrual basis income that is used on her tax return. For...