Question
1. Which of the following trusts is eligible to be an S corporation shareholder? a. Only electing small business trusts. b. Only eligible foreign trusts.
1. Which of the following trusts is eligible to be an S corporation shareholder?
a. Only electing small business trusts.
b. Only eligible foreign trusts.
c. Only qualified subchapter S trust.
d. Only electing small business trusts and qualified subchapter S trusts.
e. All of the above trusts are eligible to be S corporation shareholders.
2. S corporation borrows $5,000 from Bank at 6% interest for one year.
a. If Bill, one of several shareholders of S corporation, signs an agreement with Bank guaranteeing repayment of the loan, he may add $5,000 to the basis of his S stock.
b. If shareholder Bill signs a repayment guarantee he will be entitled to have his Schedule K-1 from S corporation list 100% of the loan interest paid as his deduction to the exclusion of the other shareholders.
c. Even if shareholder Bill signs a repayment guarantee he will not be permitted to increase his S corporation stock basis by $5,000.
d. Partnership and S corporation tax rules allowing partners/shareholders to increase the basis of partners/shareholders by the amount of partnership/corporation debt are identical.
3. Which of the following statements is correct?
a. A husband and wife count as a single S corporation shareholder.
b. A spouse and that spouses estate count as a single S corporation shareholder.
c. Members of a family with a common ancestor (who meet the six generations test), provided the appropriate election is in effect.
d. All of the above are correct.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started