1) State two tax advantages resulting from the use of “debt” rather than equity in creating the capital structure of a corporation
2) State on tax advantage resulting from the use of “equity” rather than “debt” in creating the capital structure of a corporation
3) What happens when a shareholder in a subchapter S corporation has losses and deductions allocated to him in excess of his basis in his corporate shares?
4) Would you answer in above question be different if the shareholder had also lent the subchapter S corporation cash in an amount in excess of the shareholders’ allocable share of losses and deductions, and if so how?
5) What are the principal advantages of a Subchapter Selection?
6) What adjustments are required to the basis of a shareholder’s stock while the corporation is operating as an S corp?
7) A client of yours has been advised to have his wholly owned corporation borrow funds from a third party with the loans guaranteed by the shareholder, rather than have the shareholder borrow the funds and loan it to the corporation. Do you Agree?
8) What are two tax consequences or problems can result if a C corporation with accumulated earnings and profits (Subchapter C earnings and profits”) elects Subchapter S?
9) List three methods of avoiding or reducing the so called double-tax.
10) What are the principle advantages of a Subchapter S election?
11) Is it possible for a distribution to constitute a lawful dividend for state law purposes, yet not qualify as a dividend under section 316(a)?
12) Where there are insufficient earnings and profits to cover the entire distribution to a shareholder, how would the excess distribution be treated for tax purposes?
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