1. What is Alexander's net gain or loss on the liquidation of his 100 percent interest in...

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1. What is Alexander's net gain or loss on the liquidation of his 100 percent interest in an S corporation if the corporation distributes the following three assets to him in exchange for his stock:

Asset FMV Adj. Basis Inventory $20,000 $13,000 7,000

Machines $50,000 $60,000 (10,000)

Building $100,000 $75,000 25,000170,000 148,000 22,000

Prior to any distributions, Alexander's basis in his S corporation interest was $160,000.

($12,000)

($22,000)

($10,000)

($22,000)

None of the above

2. Corbin has a $15,000 basis in his 50 percent ownership in an S corporation and lent the corporation $5,000 last year. The corporation has $30,000 of other debt. This year the corporation reported a $100,000 loss. How much of this loss may Corbin deduct?

$15,000

$20,000

$35,000

$50,000

Basis 15,000 Ownerships 50% Lent 5,000 Corporation Debt 30,000

15,000 Loss

100,000

(50,000)

3. The accumulated adjustment account is a shareholder account. can be reduced below zero by an excess distribution. determines when there is a tax-free distribution during the post-termination period.is important in applying loss limitation rules.

4. Which of the following is not a requirement to make an S election? Maximum 100 shareholders one class of stock shareholders must be citizens must be a domestic corporation

5. An S election terminates when a shareholder dies. when there is a nonresident alien shareholder when the S corporation invests in a C corporation when an S corporation has excess passive income

6. Which of the following does not affect the basis of S corporation stock? )Tax-exempt incomeNondeductible expenses charitable contributions capital gains affect stock basis

7. The S corporation income tax return includes all of the following except:

-a Schedule K.an M-1 Schedule.

-a retained earnings reconciliation.

-a reconciliation of the AAA account.

4. Walter owns and manages his 50 percent interest in a rental apartment complex. His AGI for the current year is $110,000 excluding his portion of the $70,000 loss from the apartment complex. What is his loss carryover?

15,000$

25,000$

35,000$