Day 17

Question 1

Do MCQ-02224

Question 2

What gain should the shareholder report when they contribute property with a liability in excess of basis?

Answer 2

Basis less liability = gain recognized

MCQ-08208

Question 3

Do MCQ-02283

Question 4

An 5 person (all shares are even) S-Corp has $75,000 of taxable income and the Shareholder’s each have a basis of $100,000. The S-Corp distributes $32,000 of dividends to each Shareholder. What is reported on the Individual Shareholder’s tax return as income?

Answer 4

$15,000

S-Corp distributions are non-taxable to the extend of basis

MCQ-04899

Question 5

When is MACRS half-year convention built into the table?

Answer 5

The first year it is placed into service = full percentage amount is deductible.

NOTE: When the asset is sold/disposed for half-year convention multiply MACRS Percentage x (1/2)

MCQ-02221