Loose Leaf for Principles of Taxation for Business and Investment Planning 2019 Edition
22nd Edition
ISBN: 9781260161472
Author: Sally Jones, Shelley C. Rhoades-Catanach
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 10, Problem 30AP
For each of the following situations, indicate whether the corporation is eligible to elect S corporation status.
- a. Carman Corporation has two shareholders, Carla and Manuel. Carla is a United States citizen permanently residing in Mexico. Manuel is a Mexican citizen permanently residing in the United States.
- b. Same given info as in part (a), except that Manuel resides in Mexico.
- c. Devin Corporation has 110 individual shareholders, of which 12 are members of the same family.
- d. Evans Corporation has two shareholders, Mark and Joan, who are both United States citizens and residents. Mark owns all of the 100 shares of Evans common stock outstanding, and Joan owns all of the 100 shares of Evans
preferred stock outstanding. - e. Grant Corporation has two shareholders: William, a United States citizen and resident, and ABC
Partnership . ABC is a domestic partnership with six individual partners, all of whom are United States citizens and residents.
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5. Five unrelated U.S. individuals own all of the shares of Popping, a corporation organized and operating fully in the country Vivace. Mariam, one of the shareholders, asks you whether the income from Popping will be taxed to her immediately as earned; she believes the entity is classified as "a controlled foreign corporation (CFC)." Explain how the Federal income tax law applies to the profits earned by Popping. Use the correct Federal income tax terminology in your comments.
Which of the following will disqualify a corporation from electing Subchapter S status?
All shareholders are U.S. citizens except for 10% who are resident aliens.
The election form is signed by 80% of the shareholders.
The corporation has one class of stock.
The corporation has 80 shareholder
Dried Fruit Corp. has had a valid S Corp election in effect at all times since its incorporation.
The Dried Fruit Corp. stock is owned one-third by Raisin and two-thirds by Prune. All
shareholders are US resident citizen individuals. At the beginning of the current year, Raisin's
basis in his shares was $54,000 and Prune's basis in her shares was $18,000. During the
current year, Dried Fruit Corp. earned $324,000 of net income from operations. Raisin's share
was $108,000; Prune's share was $216,000. On December 31st, Dried Fruit Corp. distributed
Grapeacre (real property) having a fair market value of $108,000, and a basis of $72,000, to
Raisin and Plumacre (real property) having a fair market value of $216,000 and a basis of
$198,000, to Prune. How much gain does Prune recognize as a result of this transaction?
$0
$36,000
$54,000
$18,000
Chapter 10 Solutions
Loose Leaf for Principles of Taxation for Business and Investment Planning 2019 Edition
Ch. 10 - Can a sole proprietorship be described as a...Ch. 10 - Mrs. Liu owns a business as a sole proprietor....Ch. 10 - This year, Mr. Pitts sole proprietorship generated...Ch. 10 - This year, Firm Q, a cash basis taxpayer, remitted...Ch. 10 - Prob. 5QPDCh. 10 - Define the tax base for the self-employment tax....Ch. 10 - Prob. 7QPDCh. 10 - Prob. 8QPDCh. 10 - Prob. 9QPDCh. 10 - Prob. 10QPD
Ch. 10 - Prob. 11QPDCh. 10 - Prob. 12QPDCh. 10 - Prob. 13QPDCh. 10 - Prob. 14QPDCh. 10 - Prob. 2APCh. 10 - Colin, a self-employed consultant, uses a room of...Ch. 10 - Prob. 4APCh. 10 - Prob. 5APCh. 10 - Prob. 6APCh. 10 - Prob. 7APCh. 10 - Prob. 9APCh. 10 - Prob. 10APCh. 10 - Jane is a self-employed attorney. This year, her...Ch. 10 - Prob. 12APCh. 10 - Prob. 13APCh. 10 - Amit is a limited partner in Reynolds Partnership....Ch. 10 - Kari is a limited partner in Lizard Partnership....Ch. 10 - Prob. 16APCh. 10 - Prob. 17APCh. 10 - Prob. 18APCh. 10 - Prob. 19APCh. 10 - Prob. 21APCh. 10 - AV Inc. is a member of an LLC. This year, AV...Ch. 10 - Prob. 23APCh. 10 - Prob. 24APCh. 10 - Prob. 25APCh. 10 - For each of the following situations, indicate...Ch. 10 - a. If Video Associates is a partnership, and her...Ch. 10 - Prob. 32APCh. 10 - Prob. 1IRPCh. 10 - Javier is a full-time employee of B Inc. and...Ch. 10 - Mr. and Mrs. Chou file a joint income tax return....Ch. 10 - Travis is a professional writer who maintains his...Ch. 10 - Prob. 5IRPCh. 10 - Prob. 6IRPCh. 10 - Prob. 7IRPCh. 10 - Prob. 8IRPCh. 10 - Prob. 9IRPCh. 10 - Paulas Schedule K-1 from an LLC reported a 12,000...Ch. 10 - Prob. 12IRPCh. 10 - Mr. and Mrs. West are the only shareholders in WW,...Ch. 10 - Prob. 14IRPCh. 10 - Prob. 15IRPCh. 10 - Prob. 16IRPCh. 10 - Prob. 17IRPCh. 10 - Prob. 1RPCh. 10 - Prob. 2RPCh. 10 - Prob. 4RPCh. 10 - Mr. and Mrs. Janus operate a restaurant business...Ch. 10 - Prob. 3TPCCh. 10 - Marla recently inherited 50,000 and is considering...
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