Which of the following statement is correct? a. A shareholder’s basis in S corpo

Question

Which of the following statement is correct?

a. A shareholder’s basis in S corporation stock can be reduced below zero only by losses from the corporation and not distribution

b. The basis of an S corporation shareholder stock is increased by cash and property distributions from the corporation that are not included in the shareholder income

c. The basis of an S corporation shareholder’s stock is increased by cash and property distributions from the corporation that are not included in the shareholder income

d. Non of the above

Which of the following statement is correct regarding years n S corporation has overall losses and distribution cash to its shareholders?

a. Item of loss are deducted from shareholders bases before distribution

b. Shareholders’ bases are reduced for noncapital, nondeductible, expenses before they are reduced for deductible expenses

c. Any items of income or gain are not taken into account when adjusting shareholders bases

d. All of the above

Which of the following statements is not correct?

a. The accumulated adjustments account is a shareholder level account

b. The accumulated adjustments account is essentially the undistributed earnings and profits of the S corporation while the S election is in effect

c. Increases to the accumulated adjustments account are applied before decreases

d. The accumulated adjustment account can be negative

Explanation / Answer

Which of the following statement is correct?

CORRECT ( C) / NOT CORRECT (N)

a. A shareholder’s basis in S corporation stock can be reduced below zero only by losses from the corporation and not distribution

C

b. The basis of an S corporation shareholder stock is increased by cash and property distributions from the corporation that are not included in the shareholder income

NC

c. The basis of an S corporation shareholder’s stock is increased by cash and property distributions from the corporation that are not included in the shareholder income

REPEATED?

d. Non of the above

NC

Which of the following statement is correct regarding years n S corporation has overall losses and distribution cash to its shareholders?

a. Item of loss are deducted from shareholders bases before distribution

NC

b. Shareholders’ bases are reduced for noncapital, nondeductible, expenses before they are reduced for deductible expenses

NC

c. Any items of income or gain are not taken into account when adjusting shareholders bases

NC

d. All of the above

Which of the following statements is not correct?

a. The accumulated adjustments account is a shareholder level account

NC

b. The accumulated adjustments account is essentially the undistributed earnings and profits of the S corporation while the S election is in effect

C

c. Increases to the accumulated adjustments account are applied before decreases

NC

d. The accumulated adjustment account can be negative

C

Which of the following statement is correct?

CORRECT ( C) / NOT CORRECT (N)

a. A shareholder’s basis in S corporation stock can be reduced below zero only by losses from the corporation and not distribution

C

b. The basis of an S corporation shareholder stock is increased by cash and property distributions from the corporation that are not included in the shareholder income

NC

c. The basis of an S corporation shareholder’s stock is increased by cash and property distributions from the corporation that are not included in the shareholder income

REPEATED?

d. Non of the above

NC

Which of the following statement is correct regarding years n S corporation has overall losses and distribution cash to its shareholders?

a. Item of loss are deducted from shareholders bases before distribution

NC

b. Shareholders’ bases are reduced for noncapital, nondeductible, expenses before they are reduced for deductible expenses

NC

c. Any items of income or gain are not taken into account when adjusting shareholders bases

NC

d. All of the above

Which of the following statements is not correct?

a. The accumulated adjustments account is a shareholder level account

NC

b. The accumulated adjustments account is essentially the undistributed earnings and profits of the S corporation while the S election is in effect

C

c. Increases to the accumulated adjustments account are applied before decreases

NC

d. The accumulated adjustment account can be negative

C

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