Question

Which, if any, of the following transactions incurred by an S corporation is not a separately stated item?

a.AMT adjustments and tax preference items. b.Qualified dividend income. c.Tax-exempt income. d.Foreign tax credit. e.Amortization of organizational expenditures.

Answer 1

Option (e.) i.e Amortizaion of organizational expenditures is the correct answer.

Reason:

Expenditures of the organization are deducted by the S corporation in determining its taxable income instead of  passing it through to the shareholders and Also Separately stated items include following:

• Section 1231 gains and losses,
• Net short-term and long-term capital gains and losses,
• Ordinary and Qualified dividends,
• Charitable contributions,
• Taxes paid to a foreign country,
• Tax-exempt interest and related expenses,
• Investment income and expenses,
• Amounts previously deducted, such as bad debts,
• Alternative minimum tax items
• Real estate income and expenses,
• Section 179 deductions and
• Tax credits