XYZ Corporation is a qualified S corporation. In 2011, its books and records reflected

the following transactions:

Business income $500,000

Real estate rental loss $(20,000)

Interest income $5,000

Salaries and wages $(50,000)

Depreciation (without Section 179 expense) $(40,000)

Section 179 expense $(10,000)

Other business deductions $(300,000)

What is XYZs ordinary income (loss) to be reported on its 2011 Form 1120S?

A. $110,000

B. $85,000

C. $105,000

D. $115,000

During 2009, Martha was issued 100 shares of qualifying small business stock (Sec. 1244

stock) for $40,000. On June 30, 2010, Martha purchased an additional 100 shares of Sec.

1244 stock from a retiring shareholder for $60,000. Her 200 shares had a total basis of

$100,000. On June 30, 2011, she learned that her entire investment had become

worthless. Martha filed a joint income tax return with her husband for 2011. How much

could she claim as an ordinary loss or a capital loss for 2011?

$100,000 ordinary loss and A. $0 capital loss.

B. $60,000 ordinary loss and $40,000 capital loss.

C. $50,000 ordinary loss and $50,000 capital loss.

D. $40,000 ordinary loss and $60,000 capital loss.

Mr. A sold a tract of land and reported the sale using the installment method of

accounting. The net sale price was $80,000, and the cost basis was $40,000. After As

death, the final $10,000 installment (plus interest) was collected by his personal

representative. What amount (other than interest) must be reported as profit on a Form

1041, U.S. Fiduciary Income Tax Return, for the year in which the $10,000 was

received?

A. $2,500

B. $0

C. $10,000

D. $5,000