6) Shanghai Corporation was organized and elected S status in the current year. How much passive investment income can Shanghai earn and retain its S status (it was never a C Corporation)?

A) none

B) 80% of gross receipts

C) 50% of gross receipts

D) no limit to the amount of passive investment income

7) Dixon Corporation was incorporated on January 1, 2015. The corporation made its S election on April 1, 2018. The corporation retains an E&P balance from its C corporation days. Which one of the following current-year income and expense items is not included in Dixon Corporation's Accumulated Adjustments Account?

A) ordinary income or loss

B) tax-exempt bond interest income

C) long-term capital gains and losses

D) amortization of organizational expenditures

8) Identify which of the following statements is true.

A) The overall S corporation loss limitation equals the shareholder's adjusted basis for his/her S corporation stock plus his/her ratable share of all S corporation liabilities.

B) The loss pass-throughs from an S corporation may produce a net operating loss for the shareholder.

C) An S corporation shareholder can increase the adjusted basis of his/her stock by any indebtedness owed the shareholder by the S corporation.

D) All of the above are false.

9) Garret and Hans own all the stock of GH Corporation. Garret sells all his GH stock to Olga on February 12. The next day, GH makes an S election. For the election to apply to the current year, who must consent to the election?

a) Just Hans

b) Garrett and Hans

c) Garrett, Hans, and Olga

d) Hans and Olga

10) All shareholders must consent to the revocation of S status.

True or False?