ACC 455 Week 5

Learning Team Week Five Problem Set

Complete the problems found in Ch. 9, 10, & 11 of Federal Taxation 2010: Corporations with your Learning Team.

C:9-32 Problem Partnership Income and Basis Adjustments (Ch. 9)

C:11-37 Problem Determination of Pass-Throughs and Stock Basis Adjustments (Ch. 11)

C:10-1 Discussion Question (Ch. 10)

C:11-31 Problem Termination of the Election (Ch. 11)

C:11-56 Comprehensive Problem Comparison of Entity Formations (Ch. 11)

Read the scenario and respond to the questions.

Support your answers with calculations, as needed.

Show your work.

Submit your completed assignment as a Microsoft Excel, a Microsoft Word, or a PDF document.

Discussion Questions

What is a liquidating distribution? What is a nonliquidating distribution? Provide an example of each.

What is an inadvertent termination of an S election? How does an S corporation and its shareholders rectify an inadvertent termination? What could happen if a company fails to rectify the termination?

A C corporation has incurred substantial losses and the owners have decided to close the business. What considerations should the owners make in this termination? Should they consider making an S election and then later, terminating the S corporation? If you were their tax advisor, what would you recommend?