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Unformatted text preview: CHAPTER 22 SOLUTIONS END OF CHAPTER QUESTIONS COVERED IN LECTURE NOT COLLECTED : 7, 8, 9, 10, 11, 14, 15, 16, 17, 25, 26, 27, AND 29. 7. The major characteristics of straight debt are: The debtor is subject to a written, unconditional promise to pay on demand or on a specified date a sum certain in money. The interest rate and payment date are not contingent on corporate profits, management discretion, or similar factors. The debt is not convertible to stock. The debt is held by a creditor who is an individual (other than a nonresident alien), an estate, or a qualified trust. Straight debt can be held by creditors actively and regularly engaged in the business of lending money. p. 22-6 8. The election is not valid. A corporation that does not exist cannot make an S corporation election. Skip made the election before becoming a corporation. See footnote 15. p. 22-8 9. Using Form 8869, an S corporation may obtain a 24-month extension of time to file Form 2553. A consent extension also may be granted if an acceptable Form 2553 is filed, reasonable cause is given, and the interests of the government are not jeopardized....
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- Fall '08