Comp SM_Ch22 - CHAPTER 22 S CORPORATIONS SOLUTIONS TO...

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CHAPTER 22 S CORPORATIONS SOLUTIONS TO PROBLEM MATERIALS Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 1 Tax differences: partnerships versus S corporation New 2 Use of NOL carryovers New 3 S corporations and like-kind exchanges Unchanged 3 4 Nonresident alien Unchanged 4 5 Reelection after termination Unchanged 5 6 Treatment of a LTCG New 7 Schedule M Unchanged 7 8 AAA bypass election Unchanged 8 9 AAA versus stock basis Unchanged 9 10 Stock basis Unchanged 10 11 Built-in gains tax Unchanged 11 12 C corporation NOL and S election Unchanged 12 13 Subchapter S taxable income Modified 13 14 Nonseparately computed income Unchanged 14 15 Nonseparately computed income Unchanged 15 16 Income allocation Unchanged 16 17 AAA New 18 Distributions Unchanged 18 19 Distributions Unchanged 19 20 Appreciated property New 21 Shareholder basis: losses and distributions Unchanged 21 22 AAA: losses and distributions Unchanged 22 23 Stock basis/AAA Unchanged 23 24 Distribution Unchanged 24 25 AEP bypass election Unchanged 25 26 Alternative minimum tax Modified 26 27 Loss allocation Unchanged 27 22-1
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22-2 2005 Comprehensive Volume/Solutions Manual Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 28 Loss allocation New 29 Loss allocation Unchanged 28 30 Built-in gains tax Unchanged 30 31 Built-in gains tax New 32 Passive investment income tax Unchanged 32 33 Stock basis Modified 33 34 Built-in gains tax Unchanged 34 35 Family S corporation and reallocation of operating income Unchanged 35 36 Liquidation of S corporation Unchanged 36 37 Reducing salary to owner New Research Problem 1 Bad debt vs. stock redemption Unchanged 2 Passive activity losses New 3 Internet activity New
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22-3 CHECK FIGURES 13.a. 13.b. 14. 15.a. 15.b. 16.a. 16.b. 17. 18. 19. 20. 21. 22. 23.a. . $78,000. $26,000. $68,000. Sammy’s share, $26,000. $2,400. Thomas $123,287.85; Estate $376,712.87; Ralph $500,000. Ralph $500,000; Thomas $200,000; Estate $300,000. $1,185,150. Tobias $90,000 ordinary income (salary); Goblins $90,000 deduction. Tobias $90,000 ordinary income (dividend); Goblins no deduction. $60,000 LTCG at S level; $20,000 flow-through to each; Charlene’s basis, $150,000. Bip’s ending stock basis $0. Ending AAA ($30,000); ending AEP $55,000. $41,000. . 23.b 24. 25. 27. 28. 29. 30.a. 30.b. 30.c. 31. 32. 33. 34. 37. $66,000 Each shareholder has $200,000 dividend income, $250,000 ending basis. Each shareholder has $300,000 dividend income. $12,000. $21,000. $19,200 operating loss; $4,800 capital loss. $19,600 liability. $29,750. $17,500. $18,550 tax liability. $10,500. Andre $6,500; Crum $16,500; Barbara $22,500. Corporate tax, $21,070; Farris’ gain, $35,718. $3,060 saved.
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Comp SM_Ch22 - CHAPTER 22 S CORPORATIONS SOLUTIONS TO...

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