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Q: When considering C corporations, the IRS checks to see whether salaries

When considering C corporations, the IRS checks to see whether salaries paid are too large. In S corporations, however, it usually must verify that salaries are large enough. Account for this differen...

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Q: How does a shareholder create debt basis in an S corporation?

How does a shareholder create debt basis in an S corporation? How is debt basis similar and dissimilar to stock basis?

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Q: What restrictions might prevent a partner from selling his partnership interest to

What restrictions might prevent a partner from selling his partnership interest to a third party?

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Q: Is a shareholder allowed to increase her basis in her S corporation

Is a shareholder allowed to increase her basis in her S corporation stock by her share of the corporation’s liabilities, as partners are able to increase the basis of their ownership interest by their...

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Q: Describe the three hurdles a taxpayer must pass if he wants to

Describe the three hurdles a taxpayer must pass if he wants to deduct a loss from his share in an S corporation.

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Q: Can a shareholder’s basis in S corporation stock ever be adjusted to

Can a shareholder’s basis in S corporation stock ever be adjusted to a negative number? Why or why not?

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Q: Describe a situation in which a former C corporation that elected to

Describe a situation in which a former C corporation that elected to be taxed as an S corporation may have its Selection automatically terminated, but a similarly situated corporation that has always...

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Q: What adjustments are made annually to a shareholder’s basis in S corporate

What adjustments are made annually to a shareholder’s basis in S corporate stock and in what order? What impact do these adjustments have on a subsequent sale of stock?

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Q: Shawn receives stock in an S corporation when it is formed by

Shawn receives stock in an S corporation when it is formed by contributing land with a tax basis of $50,000 and encumbered by a $20,000 mortgage. What is Shawn’s initial basis in his S corporation sto...

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Q: Carrie D’Lake, Reed A. Green, and Doug A.

Carrie D’Lake, Reed A. Green, and Doug A. Divot share a passion for golf and decide to go into the golf club manufacturing business together. On January 2, 2016, D’Lake, Green, and Divot form the Slic...

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