Question 1. [LO 6] Compare and contrast S corporations, C corporations, and partnerships i

1. [LO 6] Compare and contrast S corporations, C corporations, and partnerships in terms of tax consequences at formation, shareholder restrictions, income allocation, basis calculations, compensation to owners, taxation of distributions, and accounting periods.

2. [LO 1] Julie wants to create an S corporation called J’s Dance Shoes (JDS). Describe how the items below affect her eligibility for an S election.

a. Because Julie wants all her shareholders to have an equal say in the future of JDS, she gives them equal voting rights and decides those who take on a more active role in the firm will have priority in terms of distribution and liquidation rights.

b. Julie decides to incorporate under the state laws of Utah where she lives. Once she gets her business up and running, however, she plans on doing extensive business in Mexico.

3. [LO1] {Research} Lucy and Ricky Ricardo live in Los Angeles, California. After they were married, they started a business named ILL Corporation (a C corporation). For state law purposes, the shares of stock in ILL Corp. are listed under Ricky’s name only. Ricky signed the Form 2553 electing to have ILL taxed as an S corporation for federal income tax purposes, but Lucy did not sign. Given that California is a community property state, is the S election for ILL Corp. valid?

4. [LO 1] Jane has been operating Mansfield Park as a C corporation and decides she would like to make an S election. What is the earliest the election will become effective under each of these alternative scenarios?

a. Jane is on top of things and makes the election on January 1, 2014.

b. Jane is mostly on top of things and makes the election on January 15, 2014.

c. Jane makes the election on February 10, 2014. She needs a little time to convince a C corporate shareholder to sell its stock to a qualifying shareholder. That process took all of January and she was glad to have it over with.

d. Jane makes the election on March 14, 2014.

e. Jane makes the election on February 5, 2014. One of the shareholders refused to consent to the S election. He has since sold his shares (on January 15, 2014) to another shareholder who consented to the election.

5. [LO 2] Missy is one of 100 unrelated shareholders of Dalmatian, an S corporation. She is considering selling her shares. Under the following alternative scenarios, would the S election be terminated? Why or why not?

a. Missy wants to sell half her shares to a friend, a U.S. citizen, so they can rename their corporation 101 Dalmatians.

.

b. Missy’s mother’s family wants to be involved with the corporation. Missy splits half her shares evenly among her aunt, uncle, grandfather, and two cousins.

Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.