1)Assume Joe Harry sells his 25 percent interest in Joe's S Corporation, to Tyrone on January 29. Using the specific identification allocation method, how much income does Joe Harry report if Joe's S Corporation, earned $230,000 from January 1 to January 29 and a total of $2,555,000 from January 1 through December 31 (365 days)? a)$57,500 b)$230,000 c)$196,000 d)None of the choices are correct. 2)Which of the following is not an adjustment to an S corporation shareholder's stock basis? a)Increase for shareholder's share of ordinary business income b)Decrease for shareholder's share of nondeductible items c)Increase for distributions during the year d)None of the choices are correct. 3)Clampett, Incorporated, converted to an S corporation on January 1, 2024. At that time, Clampett, Incorporated, had cash ($40,000), inventory (FMV $60,000, basis $30,000), accounts receivable (FMV $40,000, basis $40,000), and equipment (FMV $60,000, basis $80,000). What is Clampett, Incorporated's net unrealized built-in gain or loss on January 1, 2024? a)$10,000 net unrealized built-in gain b)$0 net unrealized built-in gain c)$20,000 net unrealized built-in loss d)None of the choices are correct.
1)Assume Joe Harry sells his 25 percent interest in Joe's S Corporation, to Tyrone on January 29. Using the specific identification allocation method, how much income does Joe Harry report if Joe's S Corporation, earned $230,000 from January 1 to January 29 and a total of $2,555,000 from January 1 through December 31 (365 days)?
a)$57,500
b)$230,000
c)$196,000
d)None of the choices are correct.
2)Which of the following is not an adjustment to an S corporation shareholder's stock basis?
a)Increase for shareholder's share of ordinary business income
b)Decrease for shareholder's share of nondeductible items
c)Increase for distributions during the year
d)None of the choices are correct.
3)Clampett, Incorporated, converted to an S corporation on January 1, 2024. At that time, Clampett, Incorporated, had cash ($40,000), inventory (FMV $60,000, basis $30,000),
a)$10,000 net unrealized built-in gain
b)$0 net unrealized built-in gain
c)$20,000 net unrealized built-in loss
d)None of the choices are correct.
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