I. A net operating loss realized by a regular C corporation may be less beneficial to its shareholders than a net operating loss realized by a partnership or LLC because: A. Shareholders are taxed at...

1. B. A corporate loss can only be utilised by the corporation as a taxable entity in the
form of a carry back and carry forward, and is not available to the shareholders.
2. A. 35%
3. C. both of the above.
4. A. Paying distributions in the form of salary to shareholders.
B. Income – splitting through putting family members on payroll.
C. Moneys may be borrowed from the corporation instead of taking a distribution
from it.
5. False.
6. True.
7. A. Check off the box election.
8. D. The transfer is not taxable to Dan or Elite due to the application of Section 351 and
1032.
Reason: Sec 351 and Sec 1032 relating to non-recognition of gain or loss on receipt of
money or property in exchange for shares.
9. Dan‟s adjusted basis in his Elite shares is the fair market value of the shares or
$18,000, as this is the cost of the purchase.
10. Elite‟s adjusted basis in the real estate acquired from Dan is the fair market value of
$18,000, as this is the cost of purchase.
11. A. Gain = $18,000 - $14,000 = $4,000
B. Adjusted basis in shares = $18,000
C. Adjusted basis in real estate = $18,000 - $14,000 = $4,000.
12. C. The 400 shares received for the real estate are non-taxable and the 50 shares
received for services are currently taxable.
Reason: Sec 351
13. For shares referable to the real estate, holding period of 4 years is to be included. For
shares referable to services, holding...