REG Study Group October November 2013 - Page 151

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  • October 16, 2013 at 11:37 pm #481470
    Kenada
    Member

    Which one of the following statements concerning the eligibility requirements for S corporations is not correct?

    An S corporation is permitted to own 100% of the stock of a C corporation.

    An S corporation is permitted to own 75% of the stock of another S corporation.

    A partnership is not permitted to be a shareholder of an S corporation.

    An S corporation is permitted to be a partner in a partnership.

    FAR 05/27/14; 786/110 - Done !

    October 16, 2013 at 11:37 pm #481493
    Kenada
    Member

    Which one of the following statements concerning the eligibility requirements for S corporations is not correct?

    An S corporation is permitted to own 100% of the stock of a C corporation.

    An S corporation is permitted to own 75% of the stock of another S corporation.

    A partnership is not permitted to be a shareholder of an S corporation.

    An S corporation is permitted to be a partner in a partnership.

    FAR 05/27/14; 786/110 - Done !

    October 16, 2013 at 11:38 pm #481472
    Kenada
    Member

    Yes its B Skrier – I didn't read that Malpractice part very well so I got it wrong the first time. Now I know — read Malpractice = discharge, Misconduct/Malicious = no discharge

    FAR 05/27/14; 786/110 - Done !

    October 16, 2013 at 11:38 pm #481495
    Kenada
    Member

    Yes its B Skrier – I didn't read that Malpractice part very well so I got it wrong the first time. Now I know — read Malpractice = discharge, Misconduct/Malicious = no discharge

    FAR 05/27/14; 786/110 - Done !

    October 16, 2013 at 11:45 pm #481474
    Skrier
    Member

    Ok IY you got me on the Scorp. What is the correct answer. If I had to guess I would pick the last one, S- Corp is permitted to be a partner in Partnership.

    AUD- 84
    FAR- 75
    REG- 78...I am DONE!!!
    BEC- 79

    October 16, 2013 at 11:45 pm #481497
    Skrier
    Member

    Ok IY you got me on the Scorp. What is the correct answer. If I had to guess I would pick the last one, S- Corp is permitted to be a partner in Partnership.

    AUD- 84
    FAR- 75
    REG- 78...I am DONE!!!
    BEC- 79

    October 16, 2013 at 11:47 pm #481476
    smsingla
    Member

    Insiyah… I think B is the right answer

    REG 81
    BEC 74,65,78
    FAR 79
    AUD 85 DONE!!!

    October 16, 2013 at 11:47 pm #481499
    smsingla
    Member

    Insiyah… I think B is the right answer

    REG 81
    BEC 74,65,78
    FAR 79
    AUD 85 DONE!!!

    October 16, 2013 at 11:49 pm #481478
    Kenada
    Member

    Its B – the correct answer ..An S corporation is permitted to own 75% of the stock of another S corporation

    I was stumped by this one too.

    Apparently an S Corp can hold stock in a Qualified S Subsidiary corp but not an S Corp…

    FAR 05/27/14; 786/110 - Done !

    October 16, 2013 at 11:49 pm #481501
    Kenada
    Member

    Its B – the correct answer ..An S corporation is permitted to own 75% of the stock of another S corporation

    I was stumped by this one too.

    Apparently an S Corp can hold stock in a Qualified S Subsidiary corp but not an S Corp…

    FAR 05/27/14; 786/110 - Done !

    October 16, 2013 at 11:49 pm #481480
    smsingla
    Member

    @UCMCPA, Can u please explain the t- accounts u did for Igotthis question in a simpler way. I didn't understand that question either 🙁

    REG 81
    BEC 74,65,78
    FAR 79
    AUD 85 DONE!!!

    October 16, 2013 at 11:49 pm #481503
    smsingla
    Member

    @UCMCPA, Can u please explain the t- accounts u did for Igotthis question in a simpler way. I didn't understand that question either 🙁

    REG 81
    BEC 74,65,78
    FAR 79
    AUD 85 DONE!!!

    October 16, 2013 at 11:56 pm #481482
    Skrier
    Member

    @smsingla…since this is an accrual taxpayer, you can use the traditional base formula if T accounts don't work for you.

    Beginning AR 35,000

    + Revenues PLUG

    – Cash Received (55,000)

    Ending AR 25,000

    So to find the PLUG for revenues take ending 25 + Cash received 55 – Beginning 35,000= 45,000 Revenues

    AUD- 84
    FAR- 75
    REG- 78...I am DONE!!!
    BEC- 79

    October 16, 2013 at 11:56 pm #481505
    Skrier
    Member

    @smsingla…since this is an accrual taxpayer, you can use the traditional base formula if T accounts don't work for you.

    Beginning AR 35,000

    + Revenues PLUG

    – Cash Received (55,000)

    Ending AR 25,000

    So to find the PLUG for revenues take ending 25 + Cash received 55 – Beginning 35,000= 45,000 Revenues

    AUD- 84
    FAR- 75
    REG- 78...I am DONE!!!
    BEC- 79

    October 17, 2013 at 12:00 am #481484
    Kenada
    Member

    This question kind of annoyed me.

    When I read this. 600,000 includes the 50,000 accrual. Actual bonus paid was 60,000….. the answer I wanted isn't hear and the answer they gave made me feel this question is not well written. Unless my interpretation above is wrong.

    Soma Corp. had $600,000 in compensation expense for book purposes in 2012. Included in this amount was a $50,000 accrual for 2012 nonshareholder bonuses. Soma paid the actual 2012 bonus of $60,000 on March 1, 2013. In its 2012 tax return, what amount should Soma deduct as compensation expense?

    $600,000

    $540,000

    $610,000

    $550,000

    FAR 05/27/14; 786/110 - Done !

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