Area 4: Entity Taxation

Shareholder A contributes property (Basis ,000, FMV 0,000) to a newly formed C Corporation for 60% of the stock. Shareholder B contributes services (FMV ,000) for 40% of the stock. What is Shareholder A's recognized gain?

A C Corporation has taxable income of 0,000 before the charitable contribution deduction and dividends received deduction. It made cash charitable contributions of ,000. What is the allowable charitable contribution deduction?

Corp A owns 25% of Corp B. Corp A received ,000 in dividends from Corp B. Corp A's taxable income before the DRD is ,000. What is the Dividends Received Deduction (DRD)?

A C Corporation has a Net Operating Loss (NOL) carryforward of 0,000 from Year 2 arising after the TCJA. In Year 3, the corporation has taxable income of 0,000. What is the maximum NOL deduction allowed in Year 3?

A C Corporation has Accumulated E&P of (,000) (deficit) at the beginning of the year. Current E&P for the year is ,000. The corporation distributes ,000 to its sole shareholder. How is the distribution taxed?

A C Corporation redeems 50% of Shareholder X's stock for 0,000. Shareholder X's basis in the redeemed stock was ,000. After the redemption, X owns 40% of the corporation (down from 60%). How is this transaction treated for Shareholder X?

A C Corporation distributes an asset (FMV 0,000, Basis ,000) to its sole shareholder in a complete liquidation. The shareholder's basis in the stock is ,000. What are the tax consequences?

Which of the following would terminate an S Corporation election?

An S Corp shareholder has a beginning stock basis of ,000. During the year, the following occurred (pro-rata share): Ordinary Income ,000; Cash Distribution ,000; Long-Term Capital Loss ,000. What is the shareholder's ending stock basis?

A C Corp elected S status effective Jan 1, Year 1. At that time, it had an asset with FMV 0,000 and Basis ,000. In Year 3, it sold the asset for 0,000. The corporate tax rate is 21%. What is the Built-in Gains (BIG) Tax liability?

An S Corporation has an Accumulated Adjustments Account (AAA) of ,000 and Accumulated E&P (from C Corp years) of ,000. It makes a cash distribution of ,000 to its sole shareholder. The shareholder's stock basis is ,000. What is the tax treatment of the distribution?

Partner A provides services worth ,000 in exchange for a 20% capital interest in a partnership. The partnership has no liabilities. What are the tax consequences to Partner A?

A general partnership is formed. Partner A contributes cash of ,000 for a 50% interest. The partnership borrows ,000 from a bank (Recourse debt). What is Partner A's initial outside basis?

Partner X has an outside basis of ,000. In a non-liquidating distribution, X receives cash of ,000 and property with a basis to the partnership of ,000 (FMV ,000). What is X's basis in the property received and ending outside basis?

Partner Y has an outside basis of ,000. In a complete liquidation of the partnership interest, Y receives cash of ,000 and inventory with a basis of ,000. No other assets are received. What is Y's recognized gain or loss?

Partner Z sells their 30% interest in a partnership for ,000 cash. Z's outside basis was ,000. The partnership has no liabilities but has 'Hot Assets' (Unrealized Receivables) of ,000. What is the character of Z's gain?

A partner is entitled to a Guaranteed Payment of ,000. The partnership has ,000 of ordinary income before the guaranteed payment. What amount of income does the partner report, and what is the partnership's reported ordinary income?

A partner has a ,000 passive loss from a partnership. Their outside basis is ,000. Their at-risk amount is ,000. They have ,000 of passive income from another source. How much of the loss is deductible in the current year?

Which of the following members of an LLC is most likely subject to self-employment tax on their share of LLC ordinary income?

Which of the following characteristics distinguishes a 'Simple Trust' from a 'Complex Trust'?

A trust has the following activity: Interest Income ,000; Dividends ,000; Capital Gains (allocable to corpus) ,000; Trustee Fees (allocable to income) ,000. What is the Distributable Net Income (DNI)?

A decedent established a revocable trust 5 years before death, funding it with million. At the date of death, the trust assets were worth million. What amount is included in the decedent's gross estate?

In Year 1, a married couple (US citizens) gives ,000 cash to their son. They elect gift splitting. The annual exclusion is ,000 per donee. What is the taxable gift amount for the couple combined?

A tax-exempt university operates a coffee shop open to the public. The shop generates ,000 in profit. The university also has ,000 in dividend income from its endowment. What amount is subject to Unrelated Business Income Tax (UBIT)?

Which of the following organizations is most likely to be classified as a Private Foundation rather than a Public Charity?