Question 1

Cobalt, a calendar-year S corporation, was incorporated in 2014. The company had the following taxable income and distributions each year: 2014 taxable income - $0 distributions - $0 2015 taxable income - ($20,000) distributions - $0 2016 taxable income - ($30,000) distributions - $0 2017 taxable income - $150,000 distributions - $60,000 2018 taxable income - $400,000 distributions - $175,000 Cobalt has a single shareholder. His original basis in the stock was $150,000. What is the shareholder's basis at the end of 2018?

A. 150,000 B. 250,000 C. 415,000 D. 650,000

Question 2

Which of the following statements is/are true? -1- It is necessary to register with the state when forming a proprietorship. -2- It is necessary to register with the state when forming a partnership.

A. 1 Only. B. 2 Only. C. Both 1 and 2. D. Neither 1 nor 2.

Question 3

Which of the following statements is/are true? -1- Partnerships require registration with the state. -2- Limited partnerships require registration with the state.

A. 1 Only. B. 2 Only. C. Both 1 and 2. D. Neither 1 nor 2.