ACCT 441 Quiz Paper

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Quiz Submissions - ACCT 441 - Chapter 22 - Part II Homework Quiz ------------------------------------------------- Top of Form | Attempt 1 Written: Dec 1, 2014 8:30 PM - Dec 1, 2014 8:34 PM Submission View Your quiz has been submitted successfully. Question 1 | | 1 / 1 point | You are given the following facts about a solely owned S corporation. What is the shareholder’s ending stock basis? Increase in AAA $31,000 Increase in OAA 6,300 Payroll tax penalty…show more content…
By the end of 2013 David’s stock basis is zero and the basis in his note has been reduced to $8,000. During 2014, the company’s operating income is $10,000. The company makes 2014 distributions to David of $11,000. David reports a(n): | | a) | $1,000 LTCG. | | | | b) | $3,000 LTCG. | | | | c) | $11,000 LTCG. | | | | d) | Loan basis of $10,000. | | Hide Feedback | | | RATIONALE: The $11,000 distribution reduced the $10,000 income, so there is no “net increase” to be applied to the loan basis. Thus, the $11,000 distribution reduces the new $10,000 stock basis to zero, with a $1,000 LTCG. | Question 3 | | 1 / 1 point | A calendar year C corporation reports a $41,000 NOL in 2013, but it elects S status for 2014 and generates an NOL of $30,000 in that year. At all times during 2014, the stock of the corporation was owned by the same 10 shareholders, each of whom owned 10% of the stock. Kris, one of the 10 shareholders, holds an S stock basis of $2,300 at the beginning of 2014. How much of the 2014 loss, if any, is deductible by Kris? | | a) | $0. | | | | b) | $2,300. | | | | c) | $3,000. | | | | d) | $7,100.

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