Correct answer? With proper definition Under what circumstances does the economic entityassumption not apply?a) When a sole proprietor files for personal bankruptcyaffecting the businessb) When a corporation issues new sharesc) When a partnership adds new partnersd) When a company pays dividends

The economic entity assumption states that a business's financial records should be kept separate…

Answered: Under what circumstances does the…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 3BCRQ

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Discuss the circumstances under which losses are disallowed to a corporation in a liquidation.
What is the legal relationship of a sole proprietorship to its owner? A. The owner and the sole proprietorship are considered to be the same legal entity. B. A sole proprietorship can survive the death of its owner. C. The owner can shelter profits of a sole proprietorship from taxation. D. Then owner is not liable for debts incurred by the sole proprietorship.
Describe the three hurdles partner John must pass if he wants to deduct a loss from his share in an S corporation. What other loss limitation rule may impact the deductibility of losses from an S corporation?
Which of the following statements regarding losses is true? A. A personal net operating loss may be carried back but not forward to other tax years. B. A sole proprietor may deduct business losses against any form of income. C. In a regular corporation, entity level losses are passed through to the shareholders. D. In a S corporation, entity level losses are fully deductible by the shareholder under any circumstance.
When may a corporation sell, lease, exchange, mortgage, or pledge all or substantially all of its assets in the usual and regular course of its business? b. When may a corporation sell, lease, exchange, mortgage, or pledge all or substantially all of its assets other than in the usual and regular course of its business? c. What are the rights of a shareholder who dissents from a proposed sale or exchange of all or substantially all of the assets of a corporation other than in the usual and regular course of its business?
Which one of the following statements is incorrect related to the liquidation of the company? 1. Liquidation shall be effected by all the partners 2. Liquidation is processed by an appointed liquidator 3. Two or more liquidators cannot be appointed to act jointly 4. Liquidator appointment need not be as per constitutive documents.
Ef 65.
Select the best answer. Which of the following statements regarding transfers of property or services is true? For a transfer of property to a corporation, no gain is recognized by the taxpayer if the O A. transferred property is encumbered with liabilities in excess of the taxpayer's basis in the property. O O O If receipt of stock is subject to a substantial risk of forfeiture, income is recognized by th B. recipient in the year the stock is received even though the substantial risk of forfeiture h lapsed. If the contributing partner receives a capital interest in the partnership upon contributi C. services, the contributor will be taxed on the transfer when the contributor actually rec profits. In order for an exchange of services to a partnership for a profit interest to qualify as a D. nontaxable event, the service partner must provide services to the partnership or for it benefit, and the services must be provided by the service partner in his capacity as a p Submit Answers
An individual contributes property with an FMV in excess of basis to a corporatioin exchance for stock. The property is subject to a mortgage. In each of the followiinciances determine the basis obnestock in the hands of the shareholder and the bacof the propertycontributed in the hands of the corporation. Assume that the 80 ait.I meta. The property is subjoct to a morteage that is less than basis, and the corporatioassumes the morezec.o. The property is subicct to a morteage that is more than basis. and the corporatio:assumes the mortgage.
A subsidiary corporation is liquidated under Section 332. Pursuant to its liquidation, the subsidiary distributed property to a minority shareholder. With respect to this distribution, what are the tax consequences to the subsidiary corporation and to the minority shareholder?

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Under what circumstances does the economic entity assumption not apply? a) When a sole proprietor files for personal bankruptcy affecting the business b) When a corporation issues new shares c) When a partnership adds new partners d) When a company pays dividends