Question 1

What impact does an NOL carryforward have on the proper sequencing of deductions to compute corporate taxable income?

Accepted Answer

The NOL deduction must be computed twice

Question 2

For corporations, what happens to excess charitable contributions?

Accepted Answer

Corporations may not deduct charitable c

Question 3

Two days before the ex-dividend date, Drexel Corporation buys 100 shares of Zebra Corporation stock (less than 1%) for $200,000. Drexel Corporation receives $10,000 of dividends from Zebra Corporation. Two weeks after the ex-dividend date, Drexel Corporation sells the Zebra Corporation stock for $190,000. Which of the following statements is correct?

Accepted Answer

A)  Drexel Corporation cannot recognize a capital loss. 
B)  Drexel Corporation cannot take a dividends-received deduction on the Zebra Corporation dividend. 
C)  Drexel Corporation will be allowed a 50% dividends-received deduction when reporting the Zebra Corporation dividend. 
D)  Drexel Corporation will receive no dividends-received deduction because the stock was purchased ex-dividend. 
A)  Drexel Corporation cannot recognize a capital loss. 
B)  Drexel Corporation cannot take a dividends-received deduction on the Zebra Corporation dividend. 
C)  Drexel Corporation will be allowed a 50% dividends-received deduction when reporting the Zebra Corporation dividend. 
D)  Drexel Corporation will receive no dividends-received deduction because the stock was purchased ex-dividend.

Question 4

Identify which of the following statements is false.

Accepted Answer

A)  Brown Corporation owns 60% of Clark Corporation and 65% of Davis Corporation. Davis Corporation owns 10% of Clark Corporation, and Clark Corporation owns 10% of Davis Corporation. The remaining stock is owned by an individual shareholder. Brown, Davis, and Clark Corporations are a parent-subsidiary controlled group. 
B)  There are three categories of control groups: parent-subsidiary, brother-sister, and combined. 
C)  The controlled group test is applied on December 31. 
D)  A controlled group must apportion certain tax benefits among its members. 
A)  Brown Corporation owns 60% of Clark Corporation and 65% of Davis Corporation. Davis Corporation owns 10% of Clark Corporation, and Clark Corporation owns 10% of Davis Corporation. The remaining stock is owned by an individual shareholder. Brown, Davis, and Clark Corporations are a parent-subsidiary controlled group. 
B)  There are three categories of control groups: parent-subsidiary, brother-sister, and combined. 
C)  The controlled group test is applied on December 31. 
D)  A controlled group must apportion certain tax benefits among its members.

Question 5

Sparks Corporation receives a dividend of $100,000 from Jill Corporation, a C corporation. Sparks owns 70% of Jill Corporation stock. Sparks' dividends-received deduction is $65,000.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is correct?

Accepted Answer

A)  Deferred tax assets/liabilities are always classified as current on the balance sheet. 
B)  The classification of deferred tax assets/liabilities depends on whether the related asset is current or noncurrent. 
C)  Deferred tax assets are classified based on their expected reversal dates. 
D)  Deferred tax assets/liabilities are classified as noncurrent on the balance sheet. 
A)  Deferred tax assets/liabilities are always classified as current on the balance sheet. 
B)  The classification of deferred tax assets/liabilities depends on whether the related asset is current or noncurrent. 
C)  Deferred tax assets are classified based on their expected reversal dates. 
D)  Deferred tax assets/liabilities are classified as noncurrent on the balance sheet.

Question 7

Identify which of the following statements is true.

Accepted Answer

A)  The charitable contribution deduction is computed after the deduction for an NOL. 
B)  The charitable contribution deduction is computed after the dividends-received deduction. 
C)  The NOL deduction claimed by a corporation must be taken after the dividends-received deduction. 
D)  All of the above are false. 
A)  The charitable contribution deduction is computed after the deduction for an NOL. 
B)  The charitable contribution deduction is computed after the dividends-received deduction. 
C)  The NOL deduction claimed by a corporation must be taken after the dividends-received deduction. 
D)  All of the above are false.

Question 8

Beta Corporation recently purchased 100% of XYZ Corporation stock. You are their CPA. What tax issues need to be addressed before determining whether or not to file a consolidated tax return?

Accepted Answer

• Does either Beta or XYZ have losses?
•

Question 9

What are the various levels of stock ownership by corporate shareholders for the dividends-received deduction (DRD)? What is the DRD% for each level of ownership?

Accepted Answer

If a corporate shareholder owns less tha

Question 10

Identify which of the following statements is true.

Accepted Answer

A)  A corporate NOL can be carried back two years and forward 15 years. 
B)  An NOL incurred before 2018 carries forward 20 years and is not subject to the 80% of taxable income limitation. 
C)  In computing an NOL for the current year, a deduction is allowed for NOLs from previous years. 
D)  All of the above are false. 
A)  A corporate NOL can be carried back two years and forward 15 years. 
B)  An NOL incurred before 2018 carries forward 20 years and is not subject to the 80% of taxable income limitation. 
C)  In computing an NOL for the current year, a deduction is allowed for NOLs from previous years. 
D)  All of the above are false.

Question 11

Ryan Corporation sells a commercial building and land. The sales proceeds attributable to the building is $145,000. When purchased, the building is allocated $75,000 of the purchase price. The firm has depreciated the building using the MACRS rules. The MACRS deductions taken total $60,000. What is the amount and character of Ryan's recognized gain?

Accepted Answer

Realized gain: $145,000 - ($75,000 - $60

Question 12

Bebop Corporation reports the following results in the current year:
Gross income from operations $150,000
Dividends from 15% owned domestic corporation 50,000
Expenses 140,000
What is Bebop's taxable income?

Accepted Answer

Gross income from operations $150,000
Di

Question 13

Identify which of the following statements is true.

Accepted Answer

A)  A corporation that accrues compensation payable to an employee must pay the amount within two and one-half months after the close of the taxable year to deduct the amount in the year of the accrual. 
B)  Accrued compensation that is deductible in the year of accrual is considered to be part of an IRS deferred compensation plan. 
C)  Accrued compensation not paid within three and one-half months after the close of the corporation tax year is deducted in the year following the accrual. 
D)  All of the above are false. 
A)  A corporation that accrues compensation payable to an employee must pay the amount within two and one-half months after the close of the taxable year to deduct the amount in the year of the accrual. 
B)  Accrued compensation that is deductible in the year of accrual is considered to be part of an IRS deferred compensation plan. 
C)  Accrued compensation not paid within three and one-half months after the close of the corporation tax year is deducted in the year following the accrual. 
D)  All of the above are false.

Question 14

Joker Corporation owns 80% of Klue Corporation. Joker Corporation also owns 45% of Lion Corporation and 45% of Mark Corporation. Klue Corporation owns 40% of Lion Corporation and 10% of Mark Corporation. Which corporations are members of a controlled group?

Accepted Answer

A)  Klue, Lion, and Mark Corporations 
B)  Joker, Klue, Lion, and Mark Corporations 
C)  Joker, Klue, and Lion Corporations 
D)  Joker and Klue Corporations 
A)  Klue, Lion, and Mark Corporations 
B)  Joker, Klue, Lion, and Mark Corporations 
C)  Joker, Klue, and Lion Corporations 
D)  Joker and Klue Corporations

Question 15

Grant Corporation is not a large corporation for estimated tax purposes and reports on a calendar-year basis. Grant expects the following results:   Grant's tax liability for last year was $240,000. Grant's minimum total estimated tax payment for this year to avoid a penalty is

Accepted Answer

A)  $240,000. 
B)  $248,000. 
C)  $288,000. 
D)  $280,000. 
A)  $240,000. 
B)  $248,000. 
C)  $288,000. 
D)  $280,000.

Question 16

Booth Corporation sells a building classified as a residential rental property for $200,000. The MACRS straight-line depreciation taken is $20,000 and the adjusted basis of the building is $170,000. Booth Corporation must recognize ordinary income of

Accepted Answer

A)  $30,000. 
B)  $20,000. 
C)  $4,000. 
D)  $0. 
A)  $30,000. 
B)  $20,000. 
C)  $4,000. 
D)  $0.

Question 17

What is probably the most common reason for making a consolidated return election?

Accepted Answer

Filing consolidated returns al

Question 18

Which of the following results in a deferred tax asset?

Accepted Answer

A)  Revenue or gains are recognized earlier for book purposes than for tax purposes. 
B)  Operating loss or tax credit carryforwards exist. 
C)  Tax basis of an asset is less than its book. 
D)  Expenses are deductible earlier for tax purposes than for book purposes. 
A)  Revenue or gains are recognized earlier for book purposes than for tax purposes. 
B)  Operating loss or tax credit carryforwards exist. 
C)  Tax basis of an asset is less than its book. 
D)  Expenses are deductible earlier for tax purposes than for book purposes.

Question 19

Organizational expenses incurred after 2019 are amortized over five years.

Accepted Answer

A) True 
 B)False

Question 20

Identify which of the following statements is true.

Accepted Answer

A)  For expenses incurred after December 31, 2017, no deduction is allowed for any activities involving entertainment, amusement, or recreation, including expenses related to a facility used in connection with these activities. 
B)  The Dividends Received Deduction for individuals is limited to 50%. 
C)  Domestic Production Activities Deduction carry overs that originated from pre 2018 tax years are limited to 50% of taxable income until 2025. 
D)  Deductibility of business interest in a given year is limited to 80% of adjusted taxable income. 
A)  For expenses incurred after December 31, 2017, no deduction is allowed for any activities involving entertainment, amusement, or recreation, including expenses related to a facility used in connection with these activities. 
B)  The Dividends Received Deduction for individuals is limited to 50%. 
C)  Domestic Production Activities Deduction carry overs that originated from pre 2018 tax years are limited to 50% of taxable income until 2025. 
D)  Deductibility of business interest in a given year is limited to 80% of adjusted taxable income.

What impact does an NOL carryforward have on the proper sequencing of deductions to compute corporate taxable income?

For corporations, what happens to excess charitable contributions?

Identify which of the following statements is false.

Sparks Corporation receives a dividend of $100,000 from Jill Corporation, a C corporation. Sparks owns 70% of Jill Corporation stock. Sparks' dividends-received deduction is $65,000.

Which of the following statements is correct?

Identify which of the following statements is true.

Beta Corporation recently purchased 100% of XYZ Corporation stock. You are their CPA. What tax issues need to be addressed before determining whether or not to file a consolidated tax return?

What are the various levels of stock ownership by corporate shareholders for the dividends-received deduction (DRD)? What is the DRD% for each level of ownership?

Identify which of the following statements is true.

Bebop Corporation reports the following results in the current year: Gross income from operations $150,000 Dividends from 15% owned domestic corporation 50,000 Expenses 140,000 What is Bebop's taxable income?

Identify which of the following statements is true.

Joker Corporation owns 80% of Klue Corporation. Joker Corporation also owns 45% of Lion Corporation and 45% of Mark Corporation. Klue Corporation owns 40% of Lion Corporation and 10% of Mark Corporation. Which corporations are members of a controlled group?

Grant Corporation is not a large corporation for estimated tax purposes and reports on a calendar-year basis. Grant expects the following results: Grant's tax liability for last year was $240,000. Grant's minimum total estimated tax payment for this year to avoid a penalty is

Booth Corporation sells a building classified as a residential rental property for $200,000. The MACRS straight-line depreciation taken is $20,000 and the adjusted basis of the building is $170,000. Booth Corporation must recognize ordinary income of

What is probably the most common reason for making a consolidated return election?

Which of the following results in a deferred tax asset?

Organizational expenses incurred after 2019 are amortized over five years.

Identify which of the following statements is true.

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

What impact does an NOL carryforward have on the proper sequencing of deductions to compute corporate taxable income?

For corporations, what happens to excess charitable contributions?

Identify which of the following statements is false.

Sparks Corporation receives a dividend of $100,000 from Jill Corporation, a C corporation. Sparks owns 70% of Jill Corporation stock. Sparks' dividends-received deduction is $65,000.

Which of the following statements is correct?

Identify which of the following statements is true.

Beta Corporation recently purchased 100% of XYZ Corporation stock. You are their CPA. What tax issues need to be addressed before determining whether or not to file a consolidated tax return?

What are the various levels of stock ownership by corporate shareholders for the dividends-received deduction (DRD)? What is the DRD% for each level of ownership?

Identify which of the following statements is true.

Bebop Corporation reports the following results in the current year: Gross income from operations $150,000 Dividends from 15% owned domestic corporation 50,000 Expenses 140,000 What is Bebop's taxable income?

Identify which of the following statements is true.

Joker Corporation owns 80% of Klue Corporation. Joker Corporation also owns 45% of Lion Corporation and 45% of Mark Corporation. Klue Corporation owns 40% of Lion Corporation and 10% of Mark Corporation. Which corporations are members of a controlled group?

Grant Corporation is not a large corporation for estimated tax purposes and reports on a calendar-year basis. Grant expects the following results: Grant's tax liability for last year was $240,000. Grant's minimum total estimated tax payment for this year to avoid a penalty is

Booth Corporation sells a building classified as a residential rental property for $200,000. The MACRS straight-line depreciation taken is $20,000 and the adjusted basis of the building is $170,000. Booth Corporation must recognize ordinary income of

What is probably the most common reason for making a consolidated return election?

Which of the following results in a deferred tax asset?

Organizational expenses incurred after 2019 are amortized over five years.

Identify which of the following statements is true.

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