For each question on, you should assume that: * unless expressly stated to the c
ID: 2741746 • Letter: F
Question
For each question on, you should assume that:
* unless expressly stated to the contrary, all events occurred in “the current taxable year;”
* all persons are United States citizens;
* there is no tax avoidance purpose for any transaction, and that with respect to any mortgage on any property, there was a bona fide business purpose for incurring or assuming the debt;
* unless expressly stated to the contrary, the partnership has no hot assets, has no debts or other liabilities, and does not have a Section 754 election in effect;
* each partnership is a general partnership;
* there are no special allocation provisions contained in any partnership agreement; and
* unless expressly stated to the contrary, or the context of the questions requires a conclusion that the distribution was not pro rata - such as the liquidation of the interest of just one partner, all partnership distributions were pro rata.
7. Which of the following is not an eligible S corporation shareholder?
a. The estate of a United States resident alien decedent.
b. A qualified subchapter S trust with only United States resident alien beneficiaries.
c. A multi member limited liability company owned solely by citizens of the United States.
d. An electing small business trust with only United States citizen beneficiaries.
8. Michael owns stock in an S corporation. The corporation sustained a net operating loss this year. Michael’s pro rata share of the loss is $5,000. Michael’s adjusted basis in his S corporation stock is $1,000 without regard to the loss. In addition, Michael has a loan outstanding to the corporation in the amount of $2,000. Without regard to any passive loss limitation or any at risk rule limitation, what amount, if any, is Michael entitled to deduct with respect to the loss under the subchapter S rules?
a. $1,000.
b. $2,000.
c. $3,000.
d. $5,000.
9. Helen purchased 50 percent of the shares of HIJ Corp., a calendar year S corporation, for $7,000 in 2014. She also loaned the corporation $6,000 in 2014. For 2015, HIJ Corp. had an operating loss of $22,000. Without taking into consideration any loss limitations under the passive activity loss rules or the at risk rules, what is the amount of HIJ Corp.’s loss that Helen can deduct on her individual income tax return for 2015 under the subchapter S rules?
a. $0.
b. $7,000.
c. $11,000.
d. $13,000.
10. To become an S corporation, a corporation must:
a. have once been a C corporation.
b. elect to be treated as such.
c. have at least 100 shareholders.
d. only c and b.
e. all of the above.
Explanation / Answer
Ans 7 : A: The estate of a United States resident alien decedent., all the others options qualify to become share holders.
Ans 10 Ans is D; only c and b
S corporation must have lessor than 100 shareholders and and it must not be ineligible that means elected to be treated as s corporation.
Please post one question at a time thanks
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.