Exam 10: Taxation of Corporations

What are the various ownership requirements for a corporation receiving dividends to be eligible for a dividend received deduction?

What is the minimum number of individuals who must own a corporation for it to avoid meeting the personal holding company designation?

Whyley Corporation, a C corporation, has gross profits on sales of $50,000 and deductible expenses of $60,000. In addition, Whyley has a net capital gain of $30,000. Whyley's taxable income is:

Chum Corporation distributed $20,000 cash to George, its sole Class A common stockholder in May of the current year and it made a $20,000 cash distribution to Bennie its sole Class B common stockholder in December of the current year. The corporation has $15,000 in current earnings and profits for the year and $18,000 in accumulated earnings and profits. How will the corporation identify the distribution to George and Bennie?

Corporation P owns 85 percent of Corporation S1; Corporation S1 owns 60 percent of Corporation S2; Corporation S2 owns 90 percent of S3; Corporation S3 owns 60 percent of Corporation S4 and 15 percent of Corporation S2; Corporation S4 owns 100 percent of Corporation S5. Identify the consolidated group(s) of corporations.

Cloud Corporation has a taxable income of $100,000 in 2018 along with a $30,000 general business credit. What is the amount of its credit carryover and the last year to which the carryover could be used?

What do the M-1 and M-2 schedules on a Form 1120 show?

Joe owns 40 percent of the stock of AD Corporation's 2,000 outstanding shares. If Joe sells some stock back to the corporation, what is the maximum percentage of ownership that Joe can have of the outstanding stock after the sale to qualify for capital gain treatment rather than having dividend income?

The outstanding stock of Riccardo Corporation is owned as follows: Robert owns 50% of RMD, Inc. stock. The rest of RMD, Inc. stock is owned by unrelated parties. Riccardo Corporation redeems 90 of Robert's shares of stock for $9,000 in the only redemption transaction this year. Robert's basis for his stock is $10 per share (100 shares @ $10 = $1,000). Riccardo Corporation has $300,000 in E&P. What is Robert's total basis in his remaining 10 shares of stock after the redemption?

Which of these is not considered an advantage of the corporate business form?

Which of the following is not a positive adjustment to taxable income to determine current earnings and profits?

Marlin Inc., a calendar-year corporation, has gross income from operations of $160,000 and dividend income of $100,000 from a 25% owned domestic corporation for the current year. Deductible business expenses for the year are $170,000. What is Marlin's dividend received deduction for this year?

An individual shareholder may receive sale treatment on a corporate redemption if the shareholder has all of his or her stock redeemed and no related parties own any of the same corporation's stock.

A corporate net operating loss incurred in 2017 can be carried forward for twenty years after being carried back two years.

What is Gigantic Corporation's net tax liability if its taxable income is $325,000 and it has a general business credit of $125,000?

Bamboo Corporation has $130,000 of operating income, a $20,000 long-term capital loss, a $10,000 dividend from a corporation in which it owns 5 percent of the shares, and a charitable contribution of $18,000. What is the corporation's taxable income and income tax? Identify any carryovers.

What is the result of a corporation's distribution of appreciated or depreciated property as a dividend?

Monroe Corporation reported the following results for the current year: In addition to the above, Monroe Corporation has a $5,000 NOL carryforward from last year. How much can Monroe Corporation take as a dividend received deduction for the current year?

What is the purpose of earnings and profits?

What is a major advantage of the corporate form for owner-employees?