QUESTION 25

1. In an S Corporation which of the following items is not separately stated under Section 1366?

   	a.	Net income from business operations.
   	b.	Long-term capital gain, short-term capital gain, long-term capital loss, short-term capital loss.
   	c.	1231 gains, 1231 losses.
   	d.	All of the above.
   	e.	None of the above.

QUESTION 26

1. An S Corporation has four shareholders. The corporation has land with a fair market value of $100,000 and a basis of $20,000. The corporation distributes the land in-kind to the four shareholders. Each shareholders basis in the corporation is $1,000. Assume the corporation has always been an S Corporation. Assume also that the AAA balance prior to the property distribution is zero.

   	a.	Each shareholder has a $20,000 gain.
   	b.	Each shareholder has a $20,000 gain and a $4,000 gain.
   	c.	Each shareholder has a $4,000 gain.
   	d.	Each shareholder has no gain or loss until selling the property.
   	e.	None of the above.