Please provide an answer with an explanation. Thank you.

1) Daray and Nilsa form a corporation and elect to treat it as an S corporation. Daray owns 70% of the stock of the corporation, and Nilsa owns 30%. The S corporation reports a $90,000 net profit on its tax return. How much net income will Nilsa report on an individual tax return?

a.$45,000

b.$27,000

c.$90,000

d.$0

2) Karsten, the sole shareholder of Pink Corporation, sells land to the corporation for $100,000. The cost basis of the land is $110,000. What is the tax impact to Karsten?

a.Realized loss of $0, recognized loss of $0

b.Realized loss of $10,000, recognized loss of $10,000

c.The purchase is not allowed between related parties.

d.Realized loss of $10,000, recognized loss of $0

e.Realized loss of $0, recognized loss of $10,000

3) Federal tax law does not include which of the following areas of the government?

a.Legislative

b.Judicial

c.State agencies

d.Executive

e.Federal agencies