Question 1

Identify which of the following statements is true.

Accepted Answer

A)  A corporation that is a member of an affiliated group filing a consolidated tax return may be allowed a tax year which is different from the group's parent. 
B)  An S corporation must generally use a calendar year. 
C)  A corporation's first year must cover a twelve-month period. 
D)  All of the above are false. 
A)  A corporation that is a member of an affiliated group filing a consolidated tax return may be allowed a tax year which is different from the group's parent. 
B)  An S corporation must generally use a calendar year. 
C)  A corporation's first year must cover a twelve-month period. 
D)  All of the above are false.

Question 2

What are the four principles underlying ASC 740?

Accepted Answer

1) Recognize a current-year tax liabilit

Question 3

Which of the following items indicate that a company does not need a valuation allowance?

Accepted Answer

A)  existing sales contracts that will produce sufficient income to realize the deferred tax asset 
B)  excess of appreciated asset value over tax basis sufficient to realize the deferred tax asset 
C)  a strong history of earnings without considering the deferred tax asset 
D)  All of the above are correct. 
A)  existing sales contracts that will produce sufficient income to realize the deferred tax asset 
B)  excess of appreciated asset value over tax basis sufficient to realize the deferred tax asset 
C)  a strong history of earnings without considering the deferred tax asset 
D)  All of the above are correct.

Question 4

Identify which of the following statements is true.

Accepted Answer

A)  Any amount of net business interest disallowed due to limitation may be carried over indefinitely. 
B)  If a corporation accrues an obligation to pay compensation, the corporation must make the payment by year-end to be able to deduct during the current year. 
C)  Corporations can deduct up to $10,000 in capital losses per year. 
D)  Net business interest is limited to 50% of adjusted taxable income. 
A)  Any amount of net business interest disallowed due to limitation may be carried over indefinitely. 
B)  If a corporation accrues an obligation to pay compensation, the corporation must make the payment by year-end to be able to deduct during the current year. 
C)  Corporations can deduct up to $10,000 in capital losses per year. 
D)  Net business interest is limited to 50% of adjusted taxable income.

Question 5

Super Corporation gives a painting to a museum for public display on August 6. The painting was purchased on April 3 of the same year for $20,000 and is worth $30,000 at the date of gift. Also, Super accrues a charitable contribution on December 30 and pays the $12,000 contribution on February 1 of the next year. Super Corporation is a calendar-year corporation that uses the accrual method of accounting. Before considering the 10% limitation rule, the maximum deduction for the current year is

Accepted Answer

A)  $12,000. 
B)  $20,000. 
C)  $30,000. 
D)  $32,000. 
A)  $12,000. 
B)  $20,000. 
C)  $30,000. 
D)  $32,000.

Question 6

Which of the following items is a permanent difference between taxable and financial accounting income?

Accepted Answer

A)  depreciation 
B)  dividends-received deduction 
C)  bad debts 
D)  net capital loss 
A)  depreciation 
B)  dividends-received deduction 
C)  bad debts 
D)  net capital loss

Question 7

Prince Corporation donates inventory having an adjusted basis of $26,000 and an FMV of $40,000 to County Hospital, which is a qualified public charity. What is the amount of Prince's deduction?

Accepted Answer

Prince may deduct the adjusted basis plu

Question 8

Identify which of the following statements is true.

Accepted Answer

A)  A corporation is a separate taxpaying entity that must file a tax return annually. 
B)  A newly formed corporation must select its basic accounting method. 
C)  The terms "regular corporation" and "C corporation" are synonymous. 
D)  All of the above are true. 
A)  A corporation is a separate taxpaying entity that must file a tax return annually. 
B)  A newly formed corporation must select its basic accounting method. 
C)  The terms "regular corporation" and "C corporation" are synonymous. 
D)  All of the above are true.

Question 9

Identify which of the following statements is true.

Accepted Answer

A)  Form 1120 Schedule L contains the corporation's income statement. 
B)  Schedule M-1 (Form 1120) is an analysis of the corporation's retained earnings. 
C)  Organizational expense amortized over fifteen years for purposes of determining taxable income results in an upper adjustment in the initial years to book income on the Schedule M-1 when the expense is being amortized over ten years for book income purposes. 
D)  All of the above are false. 
A)  Form 1120 Schedule L contains the corporation's income statement. 
B)  Schedule M-1 (Form 1120) is an analysis of the corporation's retained earnings. 
C)  Organizational expense amortized over fifteen years for purposes of determining taxable income results in an upper adjustment in the initial years to book income on the Schedule M-1 when the expense is being amortized over ten years for book income purposes. 
D)  All of the above are false.

Question 10

On December 10 of the past year Dell Corporation (a calendar-year taxpayer) accrued an obligation for a $100,000 bonus to Muriel, a sales representative who had had an outstanding year. Muriel owns no Dell Corporation stock. The bonus is paid on May 5 of the current year. What is Dell's deduction for last year? What is Dell's deduction for this year?

Accepted Answer

Dell is allowed $0 deduction f

Question 11

A new corporation may generally select one of the following accounting methods with the exception of

Accepted Answer

A)  cash method. 
B)  accrual method. 
C)  retail method. 
D)  hybrid method. 
A)  cash method. 
B)  accrual method. 
C)  retail method. 
D)  hybrid method.

Question 12

Identify which of the following statements is false.

Accepted Answer

A)  A corporation's fiscal year generally must end on the last day of the month. 
B)  A fiscal year may not end on December 31. 
C)  A new corporation can elect a fiscal year that runs from February 16 to February 15 of the following year. 
D)  A corporation's first tax year may not cover a full 12-month period. 
A)  A corporation's fiscal year generally must end on the last day of the month. 
B)  A fiscal year may not end on December 31. 
C)  A new corporation can elect a fiscal year that runs from February 16 to February 15 of the following year. 
D)  A corporation's first tax year may not cover a full 12-month period.

Question 13

Garth Corporation donates inventory having an adjusted basis of $40,000 and an FMV of $150,000 to a qualified public charity. The inventory will be used by the charity to care for the ill. The maximum charitable contribution deduction before consideration of the 10% limitation is

Accepted Answer

A)  $40,000. 
B)  $55,000. 
C)  $80,000. 
D)  $95,000. 
A)  $40,000. 
B)  $55,000. 
C)  $80,000. 
D)  $95,000.

Question 14

Identify which of the following statements is false.

Accepted Answer

A)  The 50% dividends-received deduction is limited to 50% of the taxable income of the corporation without regard to any NOL deduction, any capital loss carryback, and the dividends-received deduction itself unless the dividends-received deduction produces an NOL. 
B)  Members of an affiliated group can claim a 90% dividends-received deduction for dividends received from other group members that is not subject to a taxable income limitation. 
C)  A corporate dividends-received deduction is not allowed for dividends received on stock held for 40 days. 
D)  All of the above are false. 
A)  The 50% dividends-received deduction is limited to 50% of the taxable income of the corporation without regard to any NOL deduction, any capital loss carryback, and the dividends-received deduction itself unless the dividends-received deduction produces an NOL. 
B)  Members of an affiliated group can claim a 90% dividends-received deduction for dividends received from other group members that is not subject to a taxable income limitation. 
C)  A corporate dividends-received deduction is not allowed for dividends received on stock held for 40 days. 
D)  All of the above are false.

Question 15

Organizational expenditures include all of the following except for

Accepted Answer

A)  costs incurred when issuing stock. 
B)  legal costs incident to the creation of the corporation. 
C)  expenses of organizational meetings. 
D)  fees paid to the state of incorporation. 
A)  costs incurred when issuing stock. 
B)  legal costs incident to the creation of the corporation. 
C)  expenses of organizational meetings. 
D)  fees paid to the state of incorporation.

Question 16

A C corporation must use a calendar year as its tax year unless it has a substantial business purpose to use a fiscal year.

Accepted Answer

A) True 
 B)False

Question 17

Blueboy Inc. contributes inventory to a qualified charity for use in feeding the needy. The inventory has a $70,000 FMV and a $30,000 adjusted basis. Blueboy Inc. can take a charitable contribution deduction of

Accepted Answer

A)  $20,000. 
B)  $30,000. 
C)  $50,000. 
D)  $60,000. 
A)  $20,000. 
B)  $30,000. 
C)  $50,000. 
D)  $60,000.

Question 18

If a controlling shareholder sells depreciable property to a controlled corporation and the property is depreciable by the purchaser, any gain on the sale is a 1231 gain.

Accepted Answer

A) True 
 B)False

Question 19

Andy owns 20% of North Corporation and 60% of Tent Corporation. North and Tent have only one class of stock outstanding. Barbara owns 50% of North Corporation and 20% of Tent Corporation. North and Tent Corporations will be brother-sister corporations if

Accepted Answer

A)  no stock ownership change occurs. 
B)  Barbara acquires an additional 10% of North stock. 
C)  Andy acquires an additional 10% of North stock and Barbara acquires an additional 10% of Tent stock. 
D)  Barbara acquires an additional 10% of North stock and an additional 10% of Tent stock. 
A)  no stock ownership change occurs. 
B)  Barbara acquires an additional 10% of North stock. 
C)  Andy acquires an additional 10% of North stock and Barbara acquires an additional 10% of Tent stock. 
D)  Barbara acquires an additional 10% of North stock and an additional 10% of Tent stock.

Question 20

Newco Corporation has asked you to help determine whether it should use the accrual method or the cash method of accounting. What are the tax issues involved in making this determination?

Accepted Answer

• Is Newco a farming corporation?
• If s

Identify which of the following statements is true.

What are the four principles underlying ASC 740?

Which of the following items indicate that a company does not need a valuation allowance?

Identify which of the following statements is true.

Which of the following items is a permanent difference between taxable and financial accounting income?

Prince Corporation donates inventory having an adjusted basis of $26,000 and an FMV of $40,000 to County Hospital, which is a qualified public charity. What is the amount of Prince's deduction?

Identify which of the following statements is true.

Identify which of the following statements is true.

A new corporation may generally select one of the following accounting methods with the exception of

Identify which of the following statements is false.

Garth Corporation donates inventory having an adjusted basis of $40,000 and an FMV of $150,000 to a qualified public charity. The inventory will be used by the charity to care for the ill. The maximum charitable contribution deduction before consideration of the 10% limitation is

Identify which of the following statements is false.

Organizational expenditures include all of the following except for

A C corporation must use a calendar year as its tax year unless it has a substantial business purpose to use a fiscal year.

Blueboy Inc. contributes inventory to a qualified charity for use in feeding the needy. The inventory has a $70,000 FMV and a $30,000 adjusted basis. Blueboy Inc. can take a charitable contribution deduction of

If a controlling shareholder sells depreciable property to a controlled corporation and the property is depreciable by the purchaser, any gain on the sale is a 1231 gain.

Andy owns 20% of North Corporation and 60% of Tent Corporation. North and Tent have only one class of stock outstanding. Barbara owns 50% of North Corporation and 20% of Tent Corporation. North and Tent Corporations will be brother-sister corporations if

Newco Corporation has asked you to help determine whether it should use the accrual method or the cash method of accounting. What are the tax issues involved in making this determination?

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.

What are the four principles underlying ASC 740?

Which of the following items indicate that a company does not need a valuation allowance?

Identify which of the following statements is true.

Which of the following items is a permanent difference between taxable and financial accounting income?

Prince Corporation donates inventory having an adjusted basis of $26,000 and an FMV of $40,000 to County Hospital, which is a qualified public charity. What is the amount of Prince's deduction?

Identify which of the following statements is true.

Identify which of the following statements is true.

A new corporation may generally select one of the following accounting methods with the exception of

Identify which of the following statements is false.

Garth Corporation donates inventory having an adjusted basis of $40,000 and an FMV of $150,000 to a qualified public charity. The inventory will be used by the charity to care for the ill. The maximum charitable contribution deduction before consideration of the 10% limitation is

Identify which of the following statements is false.

Organizational expenditures include all of the following except for

A C corporation must use a calendar year as its tax year unless it has a substantial business purpose to use a fiscal year.

Blueboy Inc. contributes inventory to a qualified charity for use in feeding the needy. The inventory has a $70,000 FMV and a $30,000 adjusted basis. Blueboy Inc. can take a charitable contribution deduction of

If a controlling shareholder sells depreciable property to a controlled corporation and the property is depreciable by the purchaser, any gain on the sale is a 1231 gain.

Andy owns 20% of North Corporation and 60% of Tent Corporation. North and Tent have only one class of stock outstanding. Barbara owns 50% of North Corporation and 20% of Tent Corporation. North and Tent Corporations will be brother-sister corporations if

Newco Corporation has asked you to help determine whether it should use the accrual method or the cash method of accounting. What are the tax issues involved in making this determination?

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