Tax Preparer:Business Tax Module 3 Exam
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1. Neil runs a print shop and has 49 regular single clients. To thank them for
their business this year, he gave each of them a small Christmas gift worth $35.
What is his allowable deduction?: 1225
2. Rules for S Corporation stock vary from those of C Corporation stock. One
such difference is:: S Corporation stock may be issued to Canadian citizens
An S Corporation may only have one type of stock
An S Corporation may have an unlimited number of shareholders
An S Corporation must have a stated par value
3. Which form of business has one single owner, who receives all of the profits
and losses of the business?: Sole Proprietorship
4. Form 1120 is used for what type of business structure?: Corporation
5. To elect S Corporation status, the taxpayer must typically file Form 2553,
Election by a Small Business Corporation, by what date?: Prior to the creation of the
corporation
On the same day as the corporation is created
By the 15th day of the third month of the initial year the corporation is created
Before the end of the first calendar year of the corporation's existence
6. Which of the following is NOT a type of partner?: Shareholder partner
Limited partner
General partner
7. Which statement is true regarding guaranteed payments to partners?: Federal
income taxes are withheld from guaranteed payments to partners
Guaranteed payments are treated as partner distributions and therefore not taxable to the partners
Guaranteed payments to partners are treated as a deduction on form 1065
Guaranteed payments are limited to cash payments
8. On which of the following forms would we report Partnership income and
expenses?: Form 1065
9. A general partner is:: A partner who owns 100% of the business
A partner who is not involved in all decisions
A partner who is personally liable for partnership debts
A partner who does not participate in the day-to-day operation of the business
, Tax Preparer:Business Tax Module 3 Exam
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10. A "Qualified Intermediary" in a like-kind exchange must:: Be an attorney
Be a Certified Public Accountant
Be unrelated to either party of the like-kind exchange
Be the executor of the estate
11. In the event of business failure, what kind of partner can lose only the
amount of money invested in the partnership?: General Partner
Unlimited Partner
Limited Partner
Stockholder
12. Stanley created a corporation as a sole shareholder to manage his real estate
investments and transferred to the corporation property for which he had a
basis of $50,000, and which had a fair market value of $250,000. No cash was
transferred by either party. What will be his basis in the stock he receives from
the corporation?: $0
$50,000
$200,000
$250,000
13. The adjusted basis of an asset is its basis:: Increased by depreciation and selling expenses
Increased by major improvements and decreased by selling expenses
Increased by depreciation and decreased by major improvements
Decreased by depreciation and increased by major improvements
14. Which form of business is usually the most complex to organize?: Corporation
15. Form 1120S is an IRS tax form to report profit and loss for which type of
entity?: S Corporation
16. The balance sheet provides which of the following account balances?: Revenue
Cost of Goods Sold
Expenses
Assets
17. What form of business results in profits being taxed twice?: S Corporation
Sole Proprietorship
Partnership
C Corporation
Study online at https://quizlet.com/_dfmmbi
1. Neil runs a print shop and has 49 regular single clients. To thank them for
their business this year, he gave each of them a small Christmas gift worth $35.
What is his allowable deduction?: 1225
2. Rules for S Corporation stock vary from those of C Corporation stock. One
such difference is:: S Corporation stock may be issued to Canadian citizens
An S Corporation may only have one type of stock
An S Corporation may have an unlimited number of shareholders
An S Corporation must have a stated par value
3. Which form of business has one single owner, who receives all of the profits
and losses of the business?: Sole Proprietorship
4. Form 1120 is used for what type of business structure?: Corporation
5. To elect S Corporation status, the taxpayer must typically file Form 2553,
Election by a Small Business Corporation, by what date?: Prior to the creation of the
corporation
On the same day as the corporation is created
By the 15th day of the third month of the initial year the corporation is created
Before the end of the first calendar year of the corporation's existence
6. Which of the following is NOT a type of partner?: Shareholder partner
Limited partner
General partner
7. Which statement is true regarding guaranteed payments to partners?: Federal
income taxes are withheld from guaranteed payments to partners
Guaranteed payments are treated as partner distributions and therefore not taxable to the partners
Guaranteed payments to partners are treated as a deduction on form 1065
Guaranteed payments are limited to cash payments
8. On which of the following forms would we report Partnership income and
expenses?: Form 1065
9. A general partner is:: A partner who owns 100% of the business
A partner who is not involved in all decisions
A partner who is personally liable for partnership debts
A partner who does not participate in the day-to-day operation of the business
, Tax Preparer:Business Tax Module 3 Exam
Study online at https://quizlet.com/_dfmmbi
10. A "Qualified Intermediary" in a like-kind exchange must:: Be an attorney
Be a Certified Public Accountant
Be unrelated to either party of the like-kind exchange
Be the executor of the estate
11. In the event of business failure, what kind of partner can lose only the
amount of money invested in the partnership?: General Partner
Unlimited Partner
Limited Partner
Stockholder
12. Stanley created a corporation as a sole shareholder to manage his real estate
investments and transferred to the corporation property for which he had a
basis of $50,000, and which had a fair market value of $250,000. No cash was
transferred by either party. What will be his basis in the stock he receives from
the corporation?: $0
$50,000
$200,000
$250,000
13. The adjusted basis of an asset is its basis:: Increased by depreciation and selling expenses
Increased by major improvements and decreased by selling expenses
Increased by depreciation and decreased by major improvements
Decreased by depreciation and increased by major improvements
14. Which form of business is usually the most complex to organize?: Corporation
15. Form 1120S is an IRS tax form to report profit and loss for which type of
entity?: S Corporation
16. The balance sheet provides which of the following account balances?: Revenue
Cost of Goods Sold
Expenses
Assets
17. What form of business results in profits being taxed twice?: S Corporation
Sole Proprietorship
Partnership
C Corporation
