1271. CHAPTER 12—S CORPORATIONS Question TF #35 The Schedule M-3 is the same for a C corporation and an S corporation. a. True b. False 1272. CHAPTER 12—S CORPORATIONS Question TF #36 A distribution of cash or other property by an S corporation to shareholders that does not exceed the balance of AAA during a one-year period following an S election termination receives special capital gain treatment. a. True b. False 1273. CHAPTER 12—S CORPORATIONS Question TF #37 Post-termination distributions that are charged against OAA do not get tax-free treatment. a. True b. False 1274. CHAPTER 12—S CORPORATIONS Question TF #38 An S corporation does not recognize a loss when distributing assets that are worth less than their basis. a. True b. False 1275. CHAPTER 12—S CORPORATIONS Question TF #39 When loss assets are distributed by an S corporation a shareholder’s basis is equal to the asset’s fair market value. a. True b. False 1276. CHAPTER 12—S CORPORATIONS Question TF #40 An S shareholder’s basis is increased by stock purchases and capital contributions. a. True b. False 1277. CHAPTER 12—S CORPORATIONS Question TF #41 An S shareholder’s basis is decreased by distributions treated as being paid from AAA. a. True b. False 1278. CHAPTER 12—S CORPORATIONS Question TF #42 Form 1120S provides a shareholder’s computation of his or her stock basis. a. True b. False 1279. CHAPTER 12—S CORPORATIONS Question TF #43 An S corporation shareholder’s basis includes his or her direct investments plus a ratable share of any corporate liabilities. a. True b. False 1280. CHAPTER 12—S CORPORATIONS Question TF #44 An S shareholder’s basis in his or her stock can be reduced below zero. a. True b. False
