Which of the following are permissable S corporation shareholders?

PICK ALL THAT APPLY!

Question options:

C corporations certain charitable organizations Partnerships individuals

Profit and loss sharing for S corporation shareholders is determined strictly by stock ownership. Special allocations and variable sharing rates are not allowed.

Question options:

True False

Tally is the sole shareholder of an S corporation that was formerly a C corporation and switched to S corporation status. The corporation has $10,000 in its AAA (Accumulated Adjustments Account) and $20,000 of undistributed earnings and profits from its C corporation years. Her basis in stock is $40,000.

Tally receives a $15,000 distribution from the corporation. SELECT ALL THE TRUE STATEMENTS FROM THE LIST BELOW!!

Question options:

the $15,000 distribution will be taxed as a dividend to Tally $10,000 of the distribution will not be taxable to Tally $5,000 of the distribution will be taxed as a dividend to Tally Her stock basis will be reduced by $15,000. Her stock basis will be reduced by $10,000.

Jonah is a 25% stockholder in an S corporation. All of the shareholders receive a proportionate property distribution from the S corporation. The total value of the property distributed is $100,000 and the basis of the property is $60,000.

SELECT ALL OF THE TRUE STATEMENTS FROM THE LIST BELOW!!

Question options:

The S corporation will recognize a $40,000 gain on this distribution that will be passed through to shareholders The S corporation will recognize no gain on this distribution Jonah will be passed through $10,000 of gain and that will increase his stock basis Johan will reduce basis of his S corporation stock by the corporation's basis in the property distributed. Jonah will reduce the basis of his S corporation stock by the $25,000 fair market value of the property received.

Done