Question

Which of the following items retains its character when passed through to share-holders of an S corporation?
a. Wages paid
b. Accelerated depreciation
c. Net long-term capital gains
d. Advertising expense
e. All of the above retain their character when passed through
9. Which of the following is true about S corporations?
a. S corporations pay corporate taxes like other corporations.
b. S corporations pay the alternative minimum tax for all income.
c. S corporations cannot issue corporate stock.
d. The S corporation status may be elected by stockholders only for corporations that meet certain qualifications.
e. None of the above.
10. Travis transfers land with a fair market value of $125,000 and basis of $25,000, to a corporation in exchange for 100 percent of the corporation’s stock. What amount of gain must Travis recognize as a result of this transaction?
a. $0
b. $25,000
c. $100,000
d. $125,000
e. None of the above
11. Carl transfers land with a fair market value of $120,000 and basis of $30,000, to a new corporation in exchange for 85 percent of the corporation’s stock. The land is subject to a $40,000 liability, which the corporation assumes. What amount of gain must Carl recognize as a result of this transaction?
a. $0
b. $40,000
c. $30,000
d. $10,000
e. None of the above
12. What is the shareholder’s basis in stock of a corporation received as a result of the transfer of property to the corporation and as a result of which gain was recognized by the stockholder?
a. The shareholder’s basis is equal to the basis of the property transferred less the gain.
b. The shareholder’s basis is equal to the fair market value of the stock received, less any liabilities transferred by the stockholder.
c. The shareholder’s basis is equal to the basis of the property transferred to the corporation, minus any liabilities transferred by the shareholder, plus the gain.
d. The shareholder’s basis is equal to the basis of the property transferred to the corporation, plus any liabilities transferred by the shareholder.
e. None of the above.
13. Which of the following statements regarding personal holding companies is false?
a. A personal holding company is one which has few shareholders.
b. A personal holding company has income primarily from investments.
c. A personal holding company operates a business which is a hobby for its owners.
d. Personal holding companies are subject to an extra 15 percent tax on income that is left undistributed.
14. Which of the following statements is true about the corporate alternative minimum tax?
a. The corporate alternative minimum tax only applies to small corporations.
b. The corporate alternative minimum tax preferences and adjustments are exactly the same as those for individuals.
c. The corporate alternative minimum tax rate is a flat 28 percent.
d. Corporations with alternative minimum taxable income greater than $310,000 receive no exemption.


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  • CreatedJuly 16, 2015
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