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Exam 12: S Corporations

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Question 61

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Explain how the domestic production activities deduction is used in computing income amounts for an S corporation.

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The § 199 deduction is determined at the...

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Question 62

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An item that appears in the "Other Adjustments Account" affects stock basis,but not AAA,such as tax-exempt interest.

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Question 63

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Where the S corporation rules are silent,C corporation provisions apply.

Post-termination distributions by a former S corporation that are charged against ____________________ do not get tax-free treatment. OAA

A distribution of cash or other property by an S corporation to shareholders that does not exceed the balance of AAA during a one-year period following an S election termination receives special capital gain treatment.

Explain the OAA concept.

When an S corporation liquidates,which of its tax attributes disappear?

Tax-exempt income at the corporate level flows through as exempt to S shareholders.

Mock Corporation converts to S corporation status in 2013.Mock used the LIFO inventory method in 2012 and had a LIFO inventory of $435,000 (FIFO value of $550,000) on the date of the S election.How much tax must be added to Mock's 2012 corporate tax liability,assuming that Mock is subject to a 35% tax rate.

The Schedule M-3 is the same for a C corporation and an S corporation.

Shareholders owning a(n)____________________ of shares (voting and nonvoting)may ____________________ revoke an election. majority,voluntarily

An S corporation may not amortize its organization expenses.

Bidden,Inc.,a calendar year S corporation,incurred the following items. Calculate Bidden's nonseparately computed income.

Which corporation is eligible to make the S election?

Compare the distribution of property rules for an S corporation with the corresponding partnership rules.

On December 31,2013,Erica Sumners owns one share of an S corporation's 10 outstanding shares of stock.The basis of Erica's share is $300.During 2014,the S corporation incurs a loss of $3,650.Determine the amount of the loss allocated to Erica,and calculate her stock basis at the end of 2014.

It is not beneficial for an S corporation to issue § 1244 stock.

Form 1120S provides an S shareholder's computation of his or her stock basis.

An S shareholder's basis is decreased by distributions treated as being paid from AAA.

Non-separately computed loss ____________________ a S shareholder's stock basis. reduces