Determine the following taxable or deductible amounts

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Unformatted text preview: The election for an S corporation is revoked on the date when over 50% of the shareholders elect to revoke. 50% test for revocation: Total number of shareholders filing consent to revoke 35,000 (30,000 + 5,000) -----------------------------------100,000 (60,000 + 40,000) Divided by total number of shareholders Percentage electing to revoke = 35% (35/100) 35% is not greater than 50%, so the S corporation election is not terminated. Choices "b", "c", and "d" are incorrect, per the above rules. CPA-02288 Type1 M/C 135. CPA-02288 A-D Nov 97 #5 Corr Ans: B PM#41 R 3-99 Page 19 How are C corporation's net capital losses used? a. b. c. d. Deducted from the corporation's ordinary income only to the extent of $3,000. Carried back three years and forward five years. Deductible in full from the corporation’s ordinary income. Carried forward 15 years. CPA-02288 Explanation Choice "b" is correct. Corporations may only deduct capital losses against capital gains. Any unused capital losses are carried back 3 years and forward 5 years as a short...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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