Questions from General Taxation

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

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

Q: On January 1, Bobby and Alicia own equally all of the

On January 1, Bobby and Alicia own equally all of the stock of an electing S corporation called Prairie Dirt Delight. The company has a $60,000 loss for the year (not a leap year). On the 219th day of...

Q: Tiger, Inc., a calendar year S corporation, is owned

Tiger, Inc., a calendar year S corporation, is owned equally by four share- holders: Ann, Becky, Chris, and David. Tiger owns investment land that was purchased for $160,000 four years ago. On Septemb...

Q: Polly has been the sole shareholder of a calendar year S corporation

Polly has been the sole shareholder of a calendar year S corporation since its inception. Polly’s stock basis is $15,500, and she receives a distribution of $19,000. Corporate-level...

Q: If the beginning balance in Swan, Inc.’s OAA is

If the beginning balance in Swan, Inc.’s OAA is $6,700 and the following transactions occur, what is Swan’s ending OAA balance? Depreciation recapture income ………………………………………. $ 21,600 Payroll tax pen...

Q: Maple, Inc., is an S corporation with a single shareholder

Maple, Inc., is an S corporation with a single shareholder, Bob Maple. Bob believes that his stock basis in the entity is $50,000, but he has lost some of the records to substantiate this amount. Mapl...

Q: Orange, Inc., a calendar year corporation in Clemson, South

Orange, Inc., a calendar year corporation in Clemson, South Carolina, elects S corporation status for 2015. The company generated a $74,000 NOL in 2014 and another NOL of $43,000 in 2015. Orange stock...

Q: Samuel Reese sold 1,000 shares of his stock in Maroon

Samuel Reese sold 1,000 shares of his stock in Maroon, Inc., an S corporation. He sold the stock for $15,700 after he had owned it for six years. Samuel had paid $141,250 for the stock, which was issu...

Q: Blue is the owner of all of the shares of Blue Bell

Blue is the owner of all of the shares of Blue Bell, an S corporation. Blue is considering receiving a salary of $110,000 from the business. She will pay the 7.65% FICA taxes on the salary, and the S...

Q: Janice is the sole owner of Catbird Company. In the current

Janice is the sole owner of Catbird Company. In the current year, Catbird had operating income of $100,000, a long-term capital gain of $15,000, and a charitable contribution of $5,000. Janice withdre...