Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Question
Chapter 11, Problem 12MCQ
To determine
Introduction: To operate a business, a taxpayer generally chooses between individual trading,
To choose: The option that is not required while the election of a Corporation as an S Corporation.
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Hana has prepared the following list of statements about corporations.
Identify each statement as true or false.
1.
A corporation is an entity separate and distinct from its owners.
2.
As a legal entity, a corporation may buy, own, and sell property: borrow money; and enter into legally
binding contracts.
3.
Shareholders have the right to vote, and to receive dividends on an annual basis.
4.
The profit of a corporation is not taxed as a separate entity.
5.
Creditors have a legal claim on the personal assets of the owners of a corporation if the corporation does
not pay its debts.
6.
Ina public company, the transfer of shares from one owner to another requires the approval of either the
corporation or other shareholders.
The board of directors of a corporation is elected by the shareholders.
7.
8.
Corporations are subject to fewer provincial and federal regulations than partnerships or proprietorships.
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Which of the following will disqualify a corporation from electing Subchapter S status?
All shareholders are U.S. citizens except for 10% who are resident aliens.
The election form is signed by 80% of the shareholders.
The corporation has one class of stock.
The corporation has 80 shareholder
Each of the incorporators of stock corporation must own or be a subscriber of at least one (1) share of the capital stock of the corporation.
TRUE
FALSE
The corporate powers of a corporation shall be exercised by the stockholders.
TRUE
FALSE
The President of the corporation may or may not be a director.
TRUE
FALSE
The Treasurer of a corporation must be a member of the Board of Directors.
TRUE
FALSE
A majority of the members of the Board of Directors as fixed in the Articles of Incorporation shall constitute a quorum, and every decision of at least a majority of the directors present at the meeting shall be valid as a corporate act.
TRUE
FALSE
Directors can attend and vote by proxy at board meetings.
TRUE
FALSE
Persons convicted by final judgment of an offense punishable by imprisonment for more than 6 years, or a violation of the corporation code, committed within 5 years prior to the date of their election or appointment are not qualified as directors or officers of any…
Chapter 11 Solutions
Income Tax Fundamentals 2020
Ch. 11 - Ironwood Corporation has ordinary taxable income...Ch. 11 - Tayla Corporation generated $400,000 of taxable...Ch. 11 - Prob. 3MCQCh. 11 - Harrison Corporation generates capital...Ch. 11 - Prob. 5MCQCh. 11 - Prob. 6MCQCh. 11 - Prob. 7MCQCh. 11 - The purpose of Schedule M-1 on the corporate tax...Ch. 11 - Prob. 9MCQCh. 11 - Prob. 10MCQ
Ch. 11 - Prob. 11MCQCh. 11 - Prob. 12MCQCh. 11 - Prob. 13MCQCh. 11 - Prob. 14MCQCh. 11 - Prob. 15MCQCh. 11 - Prob. 16MCQCh. 11 - Prob. 17MCQCh. 11 - Prob. 18MCQCh. 11 - Prob. 19MCQCh. 11 - Prob. 20MCQCh. 11 - Prob. 21MCQCh. 11 - Quince Corporation has taxable income of $485,000...Ch. 11 - Prob. 2PCh. 11 - For its current tax year, Ilex Corporation has...Ch. 11 - DeMaria Corporation, a calendar year corporation,...Ch. 11 - Fisafolia Corporation has gross income from...Ch. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - The Loquat Corporation has book net income of...Ch. 11 - Caloundra Corporation has book income of $ 40,000....Ch. 11 - Prob. 10PCh. 11 - Prob. 11PCh. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Grevilla Corporation is a manufacturing company....Ch. 11 - Prob. 15P
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- Which of the following is true about a corporation? It combines the advantages of the other forms-sole proprietorship, partnership, and limited liability corporation. Only a for-profit business can be registered as a corporation. For liability purposes, it functions as general partnership. For tax purposes, it functions as a partnership. It exists as a legal entity separate from its owners.arrow_forwardWhat is the affirmative vote required for the adoption of by-laws of the corporation? I. If adopted and filed prior to the incorporation, by all the incorporators. II. If stock corporation, majority of the outstanding capital stock. III. If stock corporation, 2/3 of the outstanding capital stock. IV. If non-stock corporation, majority of the members. * All statements are correct. All statements are incorrect. I, II and IV are correct. I, III and IV are correct.arrow_forwardWhich, if any, of the following can be eligible shareholders of an S corporation? a. A Roth IRA. b. Partnership. c. A non-U.S. corporation. (Maybe) d. A nonqualifying trust. e. None of the above can own stock.arrow_forward
- Write T if the statement is correct and F if the statement is incorrect. On the space provided, explain using the concepts discussed why your answer to a statement is T or F. 1. A person of minor age can be a shareholder but can never be an incorporator in a corporation. 2. A corporation can be an incorporator in another corporation. 3. A share certificate can be issued to those subscribers who partially paid their subscriptions. 4. A corporation or business partnership can be an incorporator but not a corporator. 5. All partnership can be an incorporator in a corporation. 6. On January 10,2021, Ana paid 90% of her subscription in Jollibee Foods Corporation. She will receive her certificate of stock on January 10,2021. 7. Continued inoperation of a corporation for at least 5 consecutive years will result in its certificate of incorporation being deemed revoked. 8. In case of conflict between the by-laws and the corporation code, the code shall prevail.arrow_forwardon at of gestion In terms of Act 69 OF 1984, the formation and juristic personality of close corporations are as follows, EXCEPT: Select one: O a. Any one or more persons, not exceeding ten, who qualify for membership of a close corporation in terms of this Act, may form a close corporation and secure its incorporation by complying with the requirements of this Act in respect of the registration of its founding statement. O b. A corporation shall have the capacity and powers of a natural person of full capacity in so far as a juristic person is capable of having such capacity or of exercising such powers. O c. A corporation formed in accordance with the provisions of this Act is on registration in terms of those provisions a juristic person and continues, irrespective of the provisions of this Act, to exist as a juristic person notwithstanding changes in its membership until it is in terms of this Act deregistered or dissolved. O d. Subject to the provisions of this Act, the members of…arrow_forwardSelect the best answer. Which of the following statements is true for an S corporation? O O O O A. Each state taxes S corporations as if they were C corporations. B. An S corporation is a pass-through entity to shareholders. C. An S corporation's built-in gains are taxed to the shareholders. D. An S corporation's excess passive income is taxed to the shareholders. Submit Answersarrow_forward
- the letter of the choice that best completes the statement or answers the question. Question 1 To be eligible for S corporation status, a corporation must have no more than O 100 shareholders O 150 shareholders O 200 shareholders O 250 shareholdersarrow_forwardTo qualify for Subchapter S treatment under the Internal Revenue Code (IRC), a domestic corporation must have more than 35 shareholders True Falsearrow_forwardN4 If all other shareholder qualify for Section 351, how to determine if Shareholder D, who contributes service and tangible property to corporation in exchange for stock, is qualify for Section 351 and if Shareholder D is in the control group?arrow_forward
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