All answers must be ORIGINAL and in your OWN WORDS!

Write a minimum 175-word response to each question C:11-24 through C:11-27.

1. Jennelle and Paula are equal partners in the J&P Manufacturing Partnership. The partnership will form J&P Corporation by exchanging the assets and liabilities of the J&P Manufacturing Partnership for all the corporation's stock on September 1 of the current year. The partnership then will liquidate by distributing the J&P Corporation stock equally to Jennelle and Paula. Both shareholders use the calendar year as their tax year and desire that the corporation make an S election. What tax issues should Jennelle and Paula consider with respect to the incorporation?

2. Williams Corporation has operated as a C corporation for the last seven years. The corporation has assets with a $450,000 adjusted basis and an $800,000 FMV. Liabilities amount to $100,000. Dan Williams, who uses a calendar year as his tax year, owns all the Williams Corporation stock. The corporation uses the accrual method of accounting and a June 30 year-end. Dan's CPA has suggested that he convert the corporation to S corporation status to reduce his total corporate/personal federal income tax liability. Dan would like to complete the conversion on the last day of the corporation's tax year. What tax issues should Dan and his CPA consider with respect to the S election?

3. Peter owns 50% of Air South Corporation, an air charter service. His S corporation stock basis at beginning of the year is $100,000. Air South has not done well this year and will report an ordinary loss of $375,000. What tax issues should Peter consider with respect to the loss?

4. Glacier Smokeries has been an S corporation since its inception six years ago. On January 1 of the current year, the corporation's two equal shareholders, Adam and Rodney, had adjusted bases of $175,000 and $225,000, respectively, for their S corporation's stock. The shareholders plan to have the corporation distribute land with a $75,000 adjusted basis and a $300,000 FMV in the current year. The shareholders also expect ordinary income to be $125,000 in the current year. What tax issues should Adam and Rodney consider with respect to the distribution?