An S corporation shareholder may carry forward unallowed losses that exceed the basis of their stock (increased by any loans the shareholder made to the corporation) for what period of time? (a) A maximum of two years. (b) A maximum of ten years. (c) A maximum of twenty years. (d) Indefinitely, until they have completed deducting the entire

An S corporation shareholder may carry forward unallowed losses that exceed the basis of their stock (increased by any loans the shareholder made to the corporation) for what period of time? (a) A maximum of two years. (b) A maximum of ten years. (c) A maximum of twenty years. (d) Indefinitely, until they have completed deducting the entire

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter20: Corporations And Parterships

Section: Chapter Questions

Problem 23CE

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which of the following statements correctly describes the carryback or carryover period for net capital losses? 1 the excess loss is then carried forward indefinitely for corporations and back three years and forward five years for noncorporations. 2. the excess loss is then carried forward indefinitely for noncorporations and back three years and forward five years for corporations. 3. there is no carryback period. Taxpayer may only carry forward for 5 years 4. the excess loss is then carried forward indefinitely for both corporations and noncorporations.
All of the following, except one, are requisites in the carry-over of net operating loss? There must be no substantial change in the ownership of the business. Carry-over is not allowed if the corporation is subject to MCIT during the taxable year. Even if the corporation paid MCIT, the running of the prescriptive period is not interrupted. The carry-over is good for one year.
In the current year, Eva has net short-term capital losses of $3,000, a net long-term capital loss of $42,000, and taxable income from wages of $36,000. a. Calculate the amount of Estes' deduction for capital losses for the current year. b. Calculate the amount and nature (short-term or long-term) of his capital loss carryforward. c. For how many years may Eva carry the unused loss forward?
Rosa contributes $50,000 to a business entity in exchange for a 10% ownership interest. Rosa materially participates in the entity. The entity incurs loss of $900,000 for the current tax year; it holds liabilities of $700,000 at the end of the year. Of this amount, $150,000 is recourse debt and $550,000 is nonrecourse debt. If an amount is zero, enter "0". a. Assume that the business entity is a partnership. How much of the entity loss can Rosa deduct on her the current tax year income tax return? $ 50,000 X What is her basis for the partnership interest at the end of the current tax year? 0 X Feedback ✓ Check My Work Under the conduit concept, the entity is viewed as merely an extension of the owners. Under the entity concept, the entity is regarded as being separate and distinct from its owners. b. Assume that the business entity is a C corporation. How much of the entity loss can Rosa deduct on her the current tax year income tax return? $ 55,000 X What is her basis for the stock at…
A calendar year S corporation reports an ordinary loss of $80,000 and a capital loss of $20,000. Mei Freiberg owns 30% of the corporate stock and has a $24,000 basis in her stock. She has asked that you determine the amounts of the ordinary loss and capital loss, if any, that flow through to Freiberg. Since her basis in the stock is $24,000, $fill in the blank 5is deductible. Thus, $fill in the blank 6of the operating loss and $fill in the blank 7of the capital loss is deducted currently by Freiberg.
Rosa contributes $50,000 to a business entity in exchange for a 10% ownership interest. Rosa materially participates in the entity. The entity incurs recourse debt and $550,000 is nonrecourse debt. loss of $900,000 for the current tax year; it holds liabilities of $700,000 at the end of the year. Of this amount, $150,000 is If an amount is zero, enter "0". a. Assume that the business entity is a partnership. How much of the entity loss can Rosa deduct on her the current tax year income tax return? 50,000 x What is her basis for the partnership interest at the end of the current tax year? Feedback V Check My Work Under the conduit concept, the entity is viewed as merely an extension of the owners. Under the entity concept, the entity is regarded as being separate and distinct from its owners. b. Assume that the business entity is a C corporation. How much of the entity loss can Rosa deduct on her the current tax year income tax return? 55,000 x What is her basis for the stock at the end…
30. Which of the following statements is CORRECT in regard to compensation expense paid to non-shareholders for an accrual-basis corporation? O The corporation may not deduct an excess of $1 million per employee per tax year If the compensation amount is considered excessive, it may be reclassified as a dividend. O The corporation may deduct all amounts earned by the employees in the current taxable year as long as it is paid within two and one-half months after the taxable year-end. 31. Which one of the following statements describes the bad-debt deduction for a corporation? O The deduction allowed for a specific bad debt is equal to its fair market value Corporations are allowed a deduction for partial worthlessness of bad debts, but only to the extent the debt has been charged off. O if a receivable is not collected by a cash-method corporation, a bad-debt deduction is allowed. 32 Which one of the following statements concerning taxes reported on Form 1120 is CORRECT? O Federal…
4) Montrose Corporation is classified as a personal holding company. It is almost year-end. The company's taxable income and regular federal income tax liability are expected to be $100,000 and $21,000, respectively. The company has claimed a $20,000 dividends-received deduction in K calculating its taxable income. Earlier in the year, Montrose paid $25,000 of dividends to its shareholders. How much in additional dividends must be paid to shareholders in order to avoid the personal holding company tax? A) $95,000 B) $74,000 C) $99,000 D) $54,000
Tennis, Corporation, a calendar-year corporation, had a deficit in accumulated earnings and profits of $(800,000) and a positive balance in current earnings and profits of $100,000. On December 31, 2021, Tennis, Corporation distributed a building to Darrel, its sole shareholder. The building had a fair market value of $500,000 and an adjusted basis to the corporation of $150,000. Darrel also assumed the $300,000 mortgage on the building. Darrel is in the 37% tax bracket . Determine the tax consequences to Darrel from this distribution of building and mortgage. Be specific—and show your calculations. What are the tax consequences to Tennis, Corporation from this distribution? After this distribution, what are the earnings and profits of Tennis, Corporation?
On January 1, Year 1, Carrot, an individual, paid $17,500 for 5 percent of the stock in Root Corp., an S corporation. In November, he loaned $8,900 to Root Corp. in return for a promissory note. Root Corp. generated a $860,000 operating loss in Year 1. Required: a. How much of his share of the loss can Carrot deduct on his Year 1 return? b. Compute Carrot's basis in his Root Corp. stock and his Root Corp. note at the end of Year 1. Complete this question by entering your answers in the tabs below. Required A Required B How much of his share of the loss can Carrot deduct on his Year 1 return? Deduction
An S corporation’s only transaction for the year was the receipt of $10,000 in tax-exempt interest. How would a $6,000 distribution be taxed to the sole shareholder if the S corporation has an accumulated adjustments account of a negative $6,500 at the beginning of the year?
Suppose that at the beginning of 2019 José's basis in his S corporation stock was $17,000 and José has directly loaned the S corporation $5,000. During 2019, the S corporation reported an $75,000 ordinary business loss and no separately stated items. How much of the ordinary loss is deductible by José if he owns 40 percent of the S corporation? Explain the rule and show computation.