ACCT 424 Week 8 Final Exam Answers

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$2,000. Nutt’s ordinary income is $15,000. Nutt’s return of capital is $11,000. None of the above 5. (TCO 8) Which statement is correct with respect to an S corporation? (Points : 5) There is no advantage also to elect § 1244 stock. An S corporation can own 85% of an insurance company. An estate may be a shareholder. A voting trust arrangement is not available. None of the above 6. (TCO 9) Which reduces a shareholder’s S corporation stock
asis? (Points : 5) Depletion in excess of basis of property Illegal kickbacks Nontaxable income Sales None of the above 7. (TCO 9) Matt and Hillary are husband and wife, and live in Pennsylvania. Using joint funds, in 1990 they purchase an insurance policy on Matt’s life and designate their daughter, Sandra, as the beneficiary. The policy has a maturity value of $2,000,000. Matt dies first and the insurance proceeds are paid to Sandra. As to the proceeds, (Points : 5)
Page 1 and 2: ACCT 424 Week 8 Final Exam Answers
Page 3 and 4: a basis of $200,000 in the land. Sa
Page 5 and 6: accumulated E & P of $75,000. For t
Page 7 and 8: John’s grandfather owns 200 share
Page 9 and 10: gain. None of the above 9. (TCO 6)
Page 11 and 12: contrary, to the IRS position. None
Page 13 and 14: personally liable. S&R sustained a
Page 15: : 5) $110,000 $146,000 $144,000 $19
Page 19: to her granddaughter, Tracy. As a r

ACCT 424 Week 8 Final Exam Answers

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