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$9.$ Identify which of the following statements is false.

The PTI $($previously taxed income$)$ represents the balance of undistributed net income which were already taxed.

An S Corporation may or may not have accumulated Earnings and Profits.

Tax exempt income increases the AAA and the basis of the S corporation stock.

The AAA balance can be negative, but the shareholder's basis in the S corporation stock cannot be less than zero.

$10.$ Which of the following statements is false?

An investment in a SSTB does not give a qualified business income deduction.

Qualified business income does not include dividends.

A single taxpayer with taxable income of $$100,000$ will not be subject to limitations based on the W$-2$ wages and the unadjusted basis in acquired qualified property in regards to the qualified business income deduction.

The qualified business income deduction can be claimed along with the standard deduction.

$11.$ Cactus Corporation, an S Corporation, had accumulated earnings and profits of $$200,000$ at the beginning of the tax year. Tex and Shirley each own $50\%$ of the stock. During the current year Cactus had $$100,000$ of ordinary income and distributed $$10,000$ to Tex and $$10,000$ to Shirley. What is Tex's taxable income for the current year?

$$50,000$

$$100,000$

$$10,000$

$$0$

$12.$ Bristol Corporation was formed as an S Corporation on January $1,2014,$ and elected S corporation status at that date. Bristol has had the same $25$ shareholders throughout its existence and has one class of stock. Bristol's Selection will terminate if it:

Allows a variation in the voting rights of the stock

Allows an individual to purchase $10$ shares

Increases the number of shareholders to $125$

$10\%$ of the shareholders vote to revoke the election

$13.$ On February $10,2023,$ Ace Corporation, a new calendar year corporation, elected S corporation status and all shareholders consented to the election. There was no change in its shareholders during the current year. Ace met all eligibility requirements for an S corporation during the preelection portion of the year. What is the earliest date on which Ace can be recognized as an S corporation?

February $10,2023$

January $1,2023$

January $1,2024$

February $10,2024$

$14.$ Boles, a calendar year S Corporation has the following:

Gross Receipts of $$70,000$; Tax Exempt Interest Income of $$4,000$; Dividends of $$10,000$; Supplies Expense of $$3,000$; and Utilities Expense of $$1,500.$ What amount is the S Corporation's ordinary taxable income?

$$70,000$

$$75,500$

$$65,500$

$$79,500$

$15.$ Bob and Sam each owned $50\%$ of Lostalot $,$ an S Corporation. Bob's basis is $$30,000$ and Sam's basis is $$15,000.$ The corporation has an operating loss for the current year of $$50,000.$ How much loss can each shareholder deduct in the current year assuming they materially participate in the business:

Bob: $$25,000$; Sam: $$15,000$

Bob: $$0$; Sam: $$0$

Bob: $$30,000$; Sam: $$15,000$

Bob: $$25,000$; Sam: $$25,000$

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