Question 1

Identify which of the following statements is true.

Accepted Answer

A)  A corporate capital loss can be carried back three years, and then can be carried forward five years. 
B)  Corporate capital loss carrybacks can offset corporate ordinary income earned in previous years. 
C)  At the election of a corporation, a net capital loss carryback can be forgone and carried forward only. 
D)  All of the above are false. 
A)  A corporate capital loss can be carried back three years, and then can be carried forward five years. 
B)  Corporate capital loss carrybacks can offset corporate ordinary income earned in previous years. 
C)  At the election of a corporation, a net capital loss carryback can be forgone and carried forward only. 
D)  All of the above are false. A

Question 2

Jeffrey Corporation has asked you to prepare its corporate federal income tax return. What issue do you need to address in considering whether Schedule M-3 is required?

Accepted Answer

Whether total assets are under $10 million.

Question 3

Sun and Moon Corporations each have only one class of stock outstanding. Their stock ownership is shown below.   Which of the four stock ownership changes that are illustrated is the minimum change that is needed if Sun and Moon Corporations are to be brother-sister corporations under the 50% requirements? (Assume the two corporations are equally valued.)

Accepted Answer

A)  No stock ownership change is required. 
B)  Arthur sells 4/5ths of his shares in Sun to David. 
C)  Arthur sells his 2/3rds of his shares to David. 
D)  Arthur must acquire an additional 30% of Moon Corporation. 
A)  No stock ownership change is required. 
B)  Arthur sells 4/5ths of his shares in Sun to David. 
C)  Arthur sells his 2/3rds of his shares to David. 
D)  Arthur must acquire an additional 30% of Moon Corporation. A

Question 4

Bishop Corporation reports taxable income of $700,000 on its tax return. Given the following information from the corporation's records, determine Bishop's net income per its financial accounting records.

Accepted Answer

A)  $520,000 
B)  $620,000 
C)  $660,000 
D)  $560,000 
A)  $520,000 
B)  $620,000 
C)  $660,000 
D)  $560,000

Question 5

Identify which of the following statements is false.

Accepted Answer

A)  A corporation with annual gross receipts of $25,000,000 or less can use the accrual method to account for sales, cost of goods sold, inventories, accounts receivable and payable, and the cash method for other income and expenses. 
B)  Casualty losses incurred by a corporation are deductible subject to a nondeductible floor similar to those applicable to individuals. 
C)  The passive loss rules do not apply to widely held C corporations. 
D)  Corporations may receive a deduction for dividends received from other corporations. 
A)  A corporation with annual gross receipts of $25,000,000 or less can use the accrual method to account for sales, cost of goods sold, inventories, accounts receivable and payable, and the cash method for other income and expenses. 
B)  Casualty losses incurred by a corporation are deductible subject to a nondeductible floor similar to those applicable to individuals. 
C)  The passive loss rules do not apply to widely held C corporations. 
D)  Corporations may receive a deduction for dividends received from other corporations.

Question 6

Chambers Corporation is a calendar year taxpayer using the accrual method of accounting. Last year its board of directors authorizes a $20,000 contribution to the Boy Scouts. Chambers pays the contribution on March 12 of the current year. What is the maximum contribution allowed for last year? What is the maximum contribution allowed in the current year?

Accepted Answer

The maximum allowable for last year is $

Question 7

Once a corporation has elected a taxable year, it can change the taxable year without IRS permission if

Accepted Answer

A)  the resulting short period has a net operating loss of $100,000 that the corporation wants to carry forward. 
B)  the corporation changed its taxable year seven years ago. 
C)  the corporation is not an S corporation. 
D)  a corporation can change its taxable year without IRS permission in all of the above situations. 
A)  the resulting short period has a net operating loss of $100,000 that the corporation wants to carry forward. 
B)  the corporation changed its taxable year seven years ago. 
C)  the corporation is not an S corporation. 
D)  a corporation can change its taxable year without IRS permission in all of the above situations.

Question 8

Sun and Moon Corporations each have only one class of stock outstanding. Their stock ownership is shown below.   Which of the four stock ownership changes that are illustrated is the minimum change that is needed if Sun and Moon Corporations are to be brother-sister corporations under the 50%-80% requirements? (Assume the two corporations are equally valued.)

Accepted Answer

A)  No stock ownership change is required. 
B)  Charles must acquire an additional 10% of Moon Corporation. 
C)  Charles must acquire an additional 5% of Sun Corporation. 
D)  Arthur must acquire an additional 30% of Moon Corporation. 
A)  No stock ownership change is required. 
B)  Charles must acquire an additional 10% of Moon Corporation. 
C)  Charles must acquire an additional 5% of Sun Corporation. 
D)  Arthur must acquire an additional 30% of Moon Corporation.

Question 9

When computing corporate taxable income, what is the proper sequencing of deductions?

Accepted Answer

The correct order for taking deductions

Question 10

Delux Corporation, a retail sales corporation, has a taxable income of $500,000. Delux Corporation's regular tax liability is

Accepted Answer

A)  $158,250. 
B)  $162,200. 
C)  $105,000. 
D)  $175,000. 
A)  $158,250. 
B)  $162,200. 
C)  $105,000. 
D)  $175,000.

Question 11

Bermuda Corporation reports the following results in 2018 and 2019?
   What is Bermuda's contribution deduction in 2018 and 2019? What is the disposition of any remaining amount?

Accepted Answer

Bermuda's 2018 contribution deduction is

Question 12

Lass Corporation reports a $25,000 net capital loss this year. The corporation reports the following net capital gains during the past three years.
   Determine the amount of net capital loss carried back to each preceding tax year and the amount of capital loss, if any, available as a carryforward.

Accepted Answer

The capital loss offsets all $11,000 of

Question 13

Quality Corporation, a regular corporation, has an opportunity to realize $50,000 of additional income in either the current year or next year. What tax issues need to be considered in determining when to realize the income?

Accepted Answer

• What is Quality's current-year taxable

Question 14

Edison Corporation is organized on July 31. The corporation starts business on August 10. The corporation adopts a November 30 fiscal year end. The following expenses are incurred during the year:   What is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending November 30?

Accepted Answer

A)  $16,000 
B)  $12,000 
C)  $5,156 
D)  $800 
A)  $16,000 
B)  $12,000 
C)  $5,156 
D)  $800

Question 15

Winter Corporation's taxable income is $500,000. In addition, Winter has the following items:   What is Winter's financial accounting income?

Accepted Answer

A)  $511,000 
B)  $513,000 
C)  $518,000 
D)  $520,000 
A)  $511,000 
B)  $513,000 
C)  $518,000 
D)  $520,000

Question 16

Identify which of the following statements is true.

Accepted Answer

A)  Organizational expenditures incurred by a corporation do not include the cost of accounting services necessary to create the corporation. 
B)  Organizational expenditures incurred by a corporation do not include the cost of printing stock. 
C)  Unamortized organizational expenses cannot be deducted when the corporation is liquidated. 
D)  All of the above are false. 
A)  Organizational expenditures incurred by a corporation do not include the cost of accounting services necessary to create the corporation. 
B)  Organizational expenditures incurred by a corporation do not include the cost of printing stock. 
C)  Unamortized organizational expenses cannot be deducted when the corporation is liquidated. 
D)  All of the above are false.

Question 17

A deferred tax asset indicates that a firm will realize the tax benefit of an event sometime in the future.

Accepted Answer

A) True 
 B)False

Question 18

Richards Corporation has taxable income of $280,000 calculated before the charitable contribution deduction and before its dividends-received deduction of $34,000. Richards makes cash contributions of $35,000 to charitable organizations. What is Richards Corporation's charitable contribution deduction for the current year?

Accepted Answer

A)  $24,600 
B)  $28,000 
C)  $31,400 
D)  $35,000 
A)  $24,600 
B)  $28,000 
C)  $31,400 
D)  $35,000

Question 19

Webster, who owns all the Bear Corporation stock, purchases a dump truck from Bear Corporation in January. The truck cost $12,000 and has a $10,000 adjusted basis at the time of the sale. Webster pays Bear the truck's $8,000 FMV. Later in the same year, Webster sells the dump truck to an unrelated party for $6,000. Webster can recognize a loss of

Accepted Answer

A)  $4,000. 
B)  $2,000. 
C)  $3,000. 
D)  $5,000. 
A)  $4,000. 
B)  $2,000. 
C)  $3,000. 
D)  $5,000.

Question 20

Paul, who owns all the stock in Rodgers Corporation, purchases a truck from the corporation in January. The truck cost $11,000 and has an adjusted basis of $9,000. Paul pays Rodgers the truck's $7,000 FMV. Paul sells the truck later in the tax year to an unrelated party for $12,000. What is the amount and character of the income that Paul will report on this year's tax return?

Accepted Answer

The corporation could not recognize the

Identify which of the following statements is true.

Jeffrey Corporation has asked you to prepare its corporate federal income tax return. What issue do you need to address in considering whether Schedule M-3 is required?

Bishop Corporation reports taxable income of $700,000 on its tax return. Given the following information from the corporation's records, determine Bishop's net income per its financial accounting records.

Identify which of the following statements is false.

Once a corporation has elected a taxable year, it can change the taxable year without IRS permission if

When computing corporate taxable income, what is the proper sequencing of deductions?

Delux Corporation, a retail sales corporation, has a taxable income of $500,000. Delux Corporation's regular tax liability is

Bermuda Corporation reports the following results in 2018 and 2019? What is Bermuda's contribution deduction in 2018 and 2019? What is the disposition of any remaining amount?

Lass Corporation reports a $25,000 net capital loss this year. The corporation reports the following net capital gains during the past three years. Determine the amount of net capital loss carried back to each preceding tax year and the amount of capital loss, if any, available as a carryforward.

Quality Corporation, a regular corporation, has an opportunity to realize $50,000 of additional income in either the current year or next year. What tax issues need to be considered in determining when to realize the income?

Winter Corporation's taxable income is $500,000. In addition, Winter has the following items: What is Winter's financial accounting income?

Identify which of the following statements is true.

A deferred tax asset indicates that a firm will realize the tax benefit of an event sometime in the future.

Tax Research

Corporate Formations and Capital Structure

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters

Exam 3: The Corporate Income Tax

Identify which of the following statements is true.

Jeffrey Corporation has asked you to prepare its corporate federal income tax return. What issue do you need to address in considering whether Schedule M-3 is required?

Bishop Corporation reports taxable income of $700,000 on its tax return. Given the following information from the corporation's records, determine Bishop's net income per its financial accounting records.

Identify which of the following statements is false.

Once a corporation has elected a taxable year, it can change the taxable year without IRS permission if

When computing corporate taxable income, what is the proper sequencing of deductions?

Delux Corporation, a retail sales corporation, has a taxable income of $500,000. Delux Corporation's regular tax liability is

Bermuda Corporation reports the following results in 2018 and 2019? What is Bermuda's contribution deduction in 2018 and 2019? What is the disposition of any remaining amount?

Lass Corporation reports a $25,000 net capital loss this year. The corporation reports the following net capital gains during the past three years. Determine the amount of net capital loss carried back to each preceding tax year and the amount of capital loss, if any, available as a carryforward.

Quality Corporation, a regular corporation, has an opportunity to realize $50,000 of additional income in either the current year or next year. What tax issues need to be considered in determining when to realize the income?

Winter Corporation's taxable income is $500,000. In addition, Winter has the following items: What is Winter's financial accounting income?

Identify which of the following statements is true.

A deferred tax asset indicates that a firm will realize the tax benefit of an event sometime in the future.

Tax Research

Corporate Formations and Capital Structure

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters