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Intermediate accounting Acct 424 midterm

Intermediate accounting Acct 424 midterm - 1 Question(TCO8)...

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1. Question: (TCO 8) Which item does  not  flow through separately to S corporation  shareholders? Your Answer: Section 1245 gain. CORREC T Tax-exempt interest income. AMT preference income. Investment interest. All of the above are separately stated items. Instructor Explanation: Points Received: 4 of 4 Comments: 2. Question: (TCO 8) An S corporation must possess the following characteristics. Your Answer: No more than 100 shareholders. Corporation organized in the U.S. Only one class of stock. All of the above are required of an S corporation. CORREC T None of the above is required of an S corporation. Points Received: 4 of 4 Comments: 3. Question: (TCO 8) What statement is correct with respect to an S corporation? Your Answer: There are now more LLCs than S corporation. S corporation status allows shareholders to realize tax benefits from corporate losses immediately. CORREC T An S corporation is prohibited from being a member of an affiliated group. An LLP may own stock in an S corporation.
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