ACCT 553 STUDY Learn by Doing/acct553study.com ACCT 553 STUDY Learn by Doing/acct553study.com | Page 17

A sole proprietorship incorporated on January 1 and elected S
corporation status. The owner contributed the following assets to the S
corporation:
Two years later, the corporation sold the machinery for $4,000 and the
building for $110,000. The machinery had accumulated depreciation
of $2,000, and the building had accumulated depreciation of $1,000.
What is the built-in gain recognized on the sale?
Which of the following items must be separately stated on Form
1120S, U.S. Income Tax Return for an S Corporation, Schedule K-1?
For which of the following entities is the owner's basis increased by
the owner's share of profits and decreased by the owner's share of
losses, but is not affected by the entity's bank loan increases or
decreases?
Frank is a 1/3 shareholder in an S corporation. At the beginning of
the year, Frank's basis in his S corporation stock was $10,000.
Frank's share of the S corporation items of income included $35,000
of income from operations, $1,000 of charitable contributions, and
$1,000 of capital gains. During the year, Frank also contributed
$15,000 of additional capital and received a $3,000 distribution from
the S corporation. What is Frank's basis at the end of the tax year?
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ACCT 553 Week 7 Homework

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