S Corp

Question 1

of shareholders

Answer 1

100
Husband and wife = 1
Six generations of family members = 1
Disallowed= partnerships, unitrusts, charity annuity trusts
Yes to personal trusts- 2 yrs after cert issued

Question 2

QSSS

Answer 2

S can own C

S can own S as a subsidiary

Question 3

Election

Answer 3

2 1/2 mo

Termination 5 yrs

Question 4

PII TERMINATION

Answer 4

For three cons tax yrs has EP and passive investment income is > 25%

Question 5

PII INCLUDES

Answer 5

SCH E AND D
interest on inventory / ar
Interest tax exempt
Effective following tax yr - otherwise at time of the event

Question 6

Ind SH may deduct

Answer 6

Research and dev 10
Mining 10
CIRC of a periodical 3
Intangible lie drilling 5

Question 7

Disallowed fringe

Answer 7

Health plans
Medical
Life ins
Food
Adoption asst
Emp awards
Transportation
= compensation

Question 8

Basis calc

Answer 8

All income increases basis

Los basis is limited to income and carry over indefinitely

Question 9

Penalty

Answer 9

$195 for ec SH for up to 12 mo

Question 10

Ea SH has 3 accounts

Answer 10

Accumulated adjustments acct - deductions
Other adjustments acct - increases
Previously taxed income account

Question 11

Loss distribution or sale

Answer 11

No loss distribution

Sale - SH rec loss

Question 12

Stock req

Answer 12

One class
May have
Variable voting right
Must have
Identical rights on liquidation of assets
Debt maybe treated as a disqualifying stock