Question 1

In 2018, the corporate tax rate is:

Accepted Answer

A)  Less than the maximum individual tax rate 
B)  More than the maximum individual tax rate 
C)  34 percent 
D)  39 percent 
A)  Less than the maximum individual tax rate 
B)  More than the maximum individual tax rate 
C)  34 percent 
D)  39 percent

Question 2

Corporations are allowed a charitable contribution deduction equal to 10% of gross profit.

Accepted Answer

A) True 
 B)False

Question 3

Moranza Corporation, which has current earnings and profits (CE&P) of $10,000 and accumulated earnings and profits (AE&P) of $30,000, makes a $15,000 distribution to its sole shareholder, Justin, at the end of the current year. Justin has a basis in his Moranza stock of $2,000. What is the amount of taxable income Justin must report from the Moranza distribution?

Accepted Answer

A)  0 
B)  $10,000 
C)  $12,000 
D)  $15,000 
A)  0 
B)  $10,000 
C)  $12,000 
D)  $15,000

Question 4

Corporation P owns 100 percent of Corporation S. During the year, P sold land to S for $50,000 that had a basis of $25,000 and S purchased $30,000 of materials from P that P paid $20,000 for. P reported separate income of $200,000 and S reported separate income of $30,000. What is the income that Corporation P reports on its consolidated tax return?

Accepted Answer

A)  $230,000 
B)  $205,000 
C)  $195,000 
D)  $140,000 
A)  $230,000 
B)  $205,000 
C)  $195,000 
D)  $140,000

Question 5

What type of organization is always a private foundation?

Accepted Answer

A)  A church that receives all of its support from members 
B)  A scholarship fund for policemen that receives half of its income from interest and dividends 
C)  A school that receives government grant funds 
D)  A church that derives 5 percent of its income from rental of its sanctuary for concerts by aspiring concert musicians. 
A)  A church that receives all of its support from members 
B)  A scholarship fund for policemen that receives half of its income from interest and dividends 
C)  A school that receives government grant funds 
D)  A church that derives 5 percent of its income from rental of its sanctuary for concerts by aspiring concert musicians.

Question 6

A corporation can elect to carry a capital loss back first to the third preceding tax year before it is carried forward five years; alternatively, it can elect to only carry the capital loss forward.

Accepted Answer

A) True 
 B)False

Question 7

A corporation has $400,000 of before-tax book income. In determining this, the corporation included $50,000 from an insurance policy paid because of the controller's death, $4,000 of premiums on other key-person life insurance policies, $10,000 interest on State of Nevada bonds, an addition of $15,000 to its bad debt reserves (bad debt expense was $20,000), and book depreciation of $34,000. The corporation's tax depreciation is $29,000. Calculate the corporation's taxable income.

Accepted Answer

$344,000 taxable income
$400,000 Book in

Question 8

The Willow Corporation reported $400,000 of taxable income. In making a conversion to book income, the accountant had to adjust for the following: a $25,000 Section 179 deduction, but book depreciation would have been $5,000; a fine of $12,500 for overweight trucks; and a net capital loss of $10,000. What is Willow Corporation's book income?

Accepted Answer

A)  $422,500 
B)  $412,500 
C)  $402,500 
D)  $397,500 
A)  $422,500 
B)  $412,500 
C)  $402,500 
D)  $397,500

Question 9

Regular corporations are free to choose any fiscal or calendar year as their tax year.

Accepted Answer

A) True 
 B)False

Question 10

What is meant by attribution of stock ownership?

Accepted Answer

Attribution is the assignment

Question 11

What are the minimum and maximum corporate tax rates excluding surtaxes for tax year 2017? How does your answer change for 2018?

Accepted Answer

In 2017, the minimum corporate

In 2018, the corporate tax rate is:

Corporations are allowed a charitable contribution deduction equal to 10% of gross profit.

What type of organization is always a private foundation?

A corporation can elect to carry a capital loss back first to the third preceding tax year before it is carried forward five years; alternatively, it can elect to only carry the capital loss forward.

Regular corporations are free to choose any fiscal or calendar year as their tax year.

What is meant by attribution of stock ownership?

What are the minimum and maximum corporate tax rates excluding surtaxes for tax year 2017? How does your answer change for 2018?

Introduction to Taxation

The Tax Practice Environment

Determining Gross Income

Employee Compensation

Deductions for Individuals and Tax Determination

Business Expenses

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Tax-Deferred Exchanges

Sole Proprietorships and Flow-Through Entities

Estates, Gifts, and Trusts

Filters

Exam 10: Taxation of Corporations

In 2018, the corporate tax rate is:

Corporations are allowed a charitable contribution deduction equal to 10% of gross profit.

What type of organization is always a private foundation?

A corporation can elect to carry a capital loss back first to the third preceding tax year before it is carried forward five years; alternatively, it can elect to only carry the capital loss forward.

Regular corporations are free to choose any fiscal or calendar year as their tax year.

What is meant by attribution of stock ownership?

What are the minimum and maximum corporate tax rates excluding surtaxes for tax year 2017? How does your answer change for 2018?

Introduction to Taxation

The Tax Practice Environment

Determining Gross Income

Employee Compensation

Deductions for Individuals and Tax Determination

Business Expenses

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Tax-Deferred Exchanges

Sole Proprietorships and Flow-Through Entities

Estates, Gifts, and Trusts

Filters