ACC 426 Exam 2 (S-Corporations and Not for Profit Organizations) | Questions And
Answers Latest {2024- 2025} A+ Graded | 100% Verified
What is the due date for returns filed by most S-Corporations? - March 15th
What is the minimum number of shareholders for an S-Corporation? - 1
What is the maximum number of shareholders for an S-Corporation? - 100
Which of the following businesses cannot become an S-Corporation? - Bank
Which of the following cannot be a shareholder in an S-Corporation? - Corporation
Which of the following is NOT separately stated on a K-1 form? - Depreciation expense
If a corporation wanted S-Corporation status for 2016, by what date must they file their forms? - March
15, 2016
What percentage of shareholders must agree to file for S-Corporation status? - 100%
What percentage of shareholders must agree to revoke S-Corporation status? - Simple majority
Under normal circumstances, how long must a corporation wait before changing S-Corporation status
back to C Corporation status? - 5 years
Which of the following activities is permitted for an S-Corporation? - Investing in the stock of a C-
Corporation
, Ronnie owns 40% of Justa Corporation which is an S-Corporation. The other 60% is owned by Franklin. If
Justa corporation makes a cash distribution to the owners of $10,000, how much should Ronnie expect
to receive? - $4,000
Ronnie owns 40% of Justa Corporation. During 2016 he was employed as the corporation's vice-
president. How will this be handled? - Ronnie will get both a K-1 and a W-2.
Ronnie owns 40% of Justa Corporation. Ronnie gets his health insurance from Justa. How will this be
handled? - Justa cannot deduct the health insurance for Ronnie. Ronnie deducts it on his 1040.
Your client Emily receives a K-1 from an S-Corporation where she is an investor. According to the K-1,
Emily has been allocated $300,000 in income. Upon your discussion with Emily, she tells you that she
shouldn't have to pay much in taxes because she only received a cash distribution of $1,000 last year.
What advice do you have for Emily? - It is time for Emily to cry and prepare to write a very big check to
the IRS.
Which of the following will increase the basis of a shareholder in an S-Corporation? - A shareholder is
allocated nontaxable income from Muni Bonds
Which of the following expenses can be deducted by a C Corporation but not by an S Corporation? -
Health and retirement benefits to all shareholders who are also employees
To what government body would a corporation notify that they wished to change from a C Corporation
to an S-Corporation? - The Internal Revenue Service
In the United States, are there more C Corporations or S-Corporations? - There are more S Corporations
What form must be filed by S Corporations each year? - 1120S
If an S Corporation has a capital loss, how will it be handled? - Any carryover or deductibility issues will
be handled by the individual shareholders
Can S Corporations select any fiscal year end? - No, S Corporations must generally use a calendar year
end
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