Chapter 13 Questions - 1 Robert transferred an office building that has an adjusted basis of $60,000 and a fair market value of $105,000 to the Wargo

Chapter 13 Questions - 1 Robert transferred an office...

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1. Robert transferred an office building that has an adjusted basis of $60,000 and a fair market value of $105,000 to the Wargo Corporation in exchange for 100% of Wargo Corporation stock and $10,000 cash. The building was subject to a mortgage of $25,000, which Wargo Corporation assumed. The fair market value of the stock was $75,000. Which is the amount of Robert's realized gain and recognized gain?Realized / RecognizedA.$55,000 / $30,000B.$50,000 / $30,000C.$50,000 / $10,000D.$35,000 / $10,0002. An S corporation will be subject to Excess Net Passive Income Tax:3. Which of the following is not eligible to be a shareholder of an S corporation?4. The Smith Corporation realized a long-term capital gain of $10,000, a short-term capital gain of $15,000 and a long-term capital loss of $27,000. What is the amount and character, if any, of carry back or carry forward that the Smith Corporation could deduct?
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5. One of the following statements with regard to stock dividends and stock rights is false. Which one is false?A.If stock dividends are not taxable, there is no reduction in the corporation's Earnings and B.If stock dividends are taxable, the distribution is treated by the distributing corporation in C.A disproportionate distribution of stock rights is not includable in gross income.D.If stock rights are taxable; basis to the shareholder-distributee is the FMV of the Rights.Profits account.the same manner as any other taxable property dividend.6. Which of the following correctly identifies Schedule M-2?7. On December 1, 2010, Bob elects to terminate his corporation's S status, effective January 1, 2011. Bob owns 55% of the corporation's stock. If Bob changes his mind, what is the earliest date that Bob could have his S Corporation status reinstated without IRS consent?
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shareholders' consent, the revocation is not valid and the S Corporation qualifies until properly terminated.
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  • Spring '13
  • MsFa
  • Corporation, Taxation in the United States

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