Question 1

Swamp Corporation,a calendar-year taxpayer,has been an S corporation for several years.However,the corporation has become quite profitable,and management feels that it would be advantageous to make a public stock offering.What are Swamp Corporation's options concerning the date of revocation of the S election?

Accepted Answer

If Swamp revokes its S election before M...

Question 2

Identify which of the following statements is true.

Accepted Answer

A)  An S corporation should have a buy-sell agreement to guard itself against an ill-advised sale of its stock.
B)  The terms "small business corporation" and "S corporation" are synonymous.
C)  A regular corporation has common and preferred stock outstanding on January 1.On January 2,the preferred stock is canceled in a recapitalization,leaving only common stock outstanding.The corporation can make an S election for this tax year.
D)  All of the above are false.E) A) and D)
F) A) and C)

Question 3

Zebra Corporation has always been an S corporation and is 100% owned by Paul.Paul has a basis of $40,000 in his Zebra stock at the beginning of the year.During the year,Zebra has an ordinary loss of $20,000 and a long-term capital gain of $10,000.In addition,Zebra Corporation distributed $55,000 in cash to Paul on December 1.Will the distribution cause Paul to recognize a gain? If so,what are its amount and character?

Accepted Answer

Basis adjustments for distributions made...

Exam 21: S Corporations

Correct Answer
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If Swamp revokes its S election before M...
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Identify which of the following statements is true.

Correct Answer
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Correct Answer
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Basis adjustments for distributions made...
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Exam 21: S Corporations

Correct AnswerverifiedIf Swamp revokes its S election before M...View AnswerShow Answer

Identify which of the following statements is true.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedBasis adjustments for distributions made...View AnswerShow Answer

Correct Answer
verified
If Swamp revokes its S election before M...
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Correct Answer
verified

Correct Answer
verified
Basis adjustments for distributions made...
View Answer