2. An S election is terminated if the S corporation has passive investment income in excess of 20 percent of gross receipts for three consecutive years.
True or False
1. Differences in voting powers are permissible across shares of S corporation stock as long as the shares have identical distribution and liquidation rights.
True or False
3. S corporations are not entitled to a dividends received deduction.
True or False
4. S corporations have considerable flexibility in making special profit and loss allocations of operating income.
True or False
5. To make an S election effective as of the beginning of the current year, an S corporation must file IRS Form 2553 within three and a half months after the beginning of the year.
True or False
6. If an S corporation shareholder sells her stock to a nonresident alien, it will automatically terminate the S election.
True or False
7. SoTired, Inc., a C corporation with a June 30 year-end, elects S corporation status this year. Assuming no special elections, SoTired, Inc., will continue to use a June 30 year-end as an S corporation.
True or False
Answer-2: False
Answer-1: True
Answer-3: True
Answer-4: False
Answer-5: False
Answer-6: True
Answer-7: False S corporations are generally required to adopt a calendar year end.
2. An S election is terminated if the S corporation has passive investment income in excess...
Business Entity 9. Which of the following events does not terminate an S corporation election? One of the corporation's 100 shareholders transfers his shares to three unrelated friends. a. b. The corporation issues a nonvoting preferred class of stock that entitles the holder to receive a greater amount on liquidation. 51% of the shareholders must consent to file a c, revocation. d. One of the corporation's 100 shareholders marries and transfers half of her shares to her husband. 10. The...
Burt is the custodian at Quaker Inn, an S corporation that has paid him bonuses over the years in the form of shares in the corporation. Burt now holds 276 shares in Quaker Inn. While listening to a television debate about a national health care plan, Burt decides that the company's health coverage is unfair. He is concerned about this because his wife, Dora, is seriously ill. During the second week of December, Burt informs Quaker's president that he would...
Caterpillar Inc. 2017 2016 5 S 51,822 2,900 54,722 42,676 2,786 45,462 35,773 2,764 38,537 STATEMENT 1 Consolidated Results of Operations for the Years Ended December 31 Dollar is willions cat pershare dal Sales and revenues Sales of Machinery, Energy & Transportation Revenues of Financial Products Total sales and revenues Operating costs Cost of goods sold Selling, general and administrative expenses Research and development expenses Interest expense of Financial Products Goodwill impairment charge Other operating incomel expenses Total operating costs...
CASE 20 Enron: Not Accounting for the Future* INTRODUCTION Once upon a time, there was a gleaming office tower in Houston, Texas. In front of that gleaming tower was a giant "E" slowly revolving, flashing in the hot Texas sun. But in 2001, the Enron Corporation, which once ranked among the top Fortune 500 companies, would collapse under a mountain of debt that had been concealed through a complex scheme of off-balance-sheet partnerships. Forced to declare bankruptcy, the energy firm...
Case: Enron: Questionable Accounting Leads to CollapseIntroductionOnce upon a time, there was a gleaming office tower in Houston, Texas. In front of that gleaming tower was a giant “E,” slowly revolving, flashing in the hot Texas sun. But in 2001, the Enron Corporation, which once ranked among the top Fortune 500 companies, would collapse under a mountain of debt that had been concealed through a complex scheme of off-balance-sheet partnerships. Forced to declare bankruptcy, the energy firm laid off 4,000...