ch22 - 1. The alternative minimum tax may apply to an S...

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1. The alternative minimum tax may apply to an S corporation. a. True *b. False 2. The alternative minimum tax does not apply to an S corporation. *a. True b. False 3. Liabilities affect owners’ basis differently between a partnership and an S corporation. *a. True b. False 4. An S election allows shareholders to realize tax benefits from losses immediately. *a. True b. False 5. An NOL from a Subchapter C year can be used to offset operating income in an S corporation year. a. True *b. False 6. An estate can be an S corporation shareholder. *a. True b. False 7. A maximum dollar sales limitation applies to an S corporation. a. True *b. False 8. Differences in distribution or liquidation rights among shareholders do not create a second class of stock. a. True *b. False 9. Straight debt issued in an S corporation year will not be treated as a second class of stock and will not disqualify an S election.
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a. True *b. False 10. A widower and his spouse’s estate are treated as one shareholder. *a. True b. False 11. A former spouse is treated as being in the same family as the individual to whom he or she was married. *a. True b. False 12. A limited liability company can own S corporation stock. a. True *b. False 13. An S corporation can be a partner in a partnership. *a. True b. False 14. Most Roth IRAs can own S corporation stock. a. True *b. False 15. For S corporation status to apply in the current tax year, the election must be filed during the grace period before the 15th day of the third month of the current year. a. True *b. False 16. A limited liability company can make an S election. *a. True b. False 17. A voluntary revocation of an S election requires only a consent of shareholders owning a majority of shares on the day that the revocation is made.
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*a. True b. False 18. A corporation can revoke its S status prospectively. *a. True b. False 19. There is no limit on the amount of passive investment income that an S corporation can receive during the year. a. True *b. False 20. Rents always are considered to be passive investment income in S status. a. True *b. False 21. Tax-exempt income is a Schedule K item for an S corporation. *a. True b. False 22. An S corporation’s separately stated items are identical to those separately stated by partnerships. *a. True b. False 23. An S corporation can take advantage of the dividends received deduction. a. True *b. False 24. The Section 179 expense deduction is a Schedule K item. *a. True b. False 25. Depreciation recapture income is a Schedule K item. a. True *b. False
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26. A per-day, per-share allocation of flow-through S corporation items must be used, unless the shareholder disposes of the entire interest in the entity. *a. True
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ch22 - 1. The alternative minimum tax may apply to an S...

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