Oxen maintains a valid s election and does not

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Chapter 2 / Exercise 4
Quantitative Methods for Business
Anderson/Sweeney
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Oxen maintains a valid S election and does not distribute any assets (cash or property) to its sole shareholder, Megan. As a result, Megan must recognize:A. Ordinary income of $103,000.B. Ordinary income of $103,000 and long-term capital gain of $5,000. C.Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss. D. Ordinary income of $109,000.
98. On January 1, Bobby and Alice own equally all of the stock of an electing S corporation called Prairie Dirt Delight. The dirt company has a $60,000 loss for a non-leap year. On the 200th day of the year, Bobby sells his one-half of the stock to his son, Saul. How much of the $60,000 loss, if any, is allocated to Bobby?
99. A calendar year C corporation reports a $41,000 NOL in 2012, but it elects S status for 2013 and generates an NOL of $30,000 in that year. At all times during 2013, the stock of the corporation was owned by the same 10 shareholders, each of whom owned 10% of the stock. Kris, one of the 10 shareholders, holds an S stock basis of $2,300 at the beginning of 2013. How much of the 2013 loss, if any, is deductible by Kris?
100. An S corporation reports a recognized built-in gain of $110,000 and taxable income of $98,000. The company carries an $8,000 NOL carryforward from a C corporation year, and a $7,000 business credit carryforward from a C corporation year. The built-in gains tax liability is:
101. A cash basis calendar year C corporation reports $100,000 of accounts receivable on the date of its conversion to S status on February 14. By the end of the year, $60,000 of these receivables are collected. Calculate any built-in gains tax, assuming that there is sufficient taxable income. A. $0.B. $10,000.C.$21,000.D. $35,000.E. Some other amount.
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Chapter 2 / Exercise 4
Quantitative Methods for Business
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102. Mock Corporation converts to S corporation status in 2013. Mock used the LIFO inventory method in 2012 and had a LIFO inventory of $435,000 (FIFO value of $550,000) on the date of the S election. How much tax must be added to Mock’s 2012 corporate tax liability, assuming that Mock is subject to a 35% tax rate.
103. Pepper, Inc., an S corporation, reports sales revenues of $400,000, taxable interest of $380,000, operating expenses of $250,000, and deductions attributable to the interest income of $140,000. What is Pepper’s passive income penalty tax payable, if any?
104. Claude Bergeron sold 1,000 shares of Ditta, Inc., an S corporation, for $12,000. He had owned the stock for three years and had a stock basis of $111,000 in the shares. Claude is single, and he is the original owner of the § 1244 stock shares. Calculate the appropriate tax treatment.

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