June Corporation has the following income and expense items during the current year: \[\begin{array} { |l | r| } \hline \text { Net loss from operations } & ( \$ 140,000) \\ \hline \text { Dividends received } 25 \% \text { owned corporations } & 240,000 \\ \hline \end{array}\] The allowed dividends-received deduction is

A) $65,000. B) $0. C) $156,000. D) $240,000. A) $65,000. B) $0. C) $156,000. D) $240,000.

Exam 32: Corporations

A shareholder transfers a building subject to a mortgage in a Sec.351 transfer.The corporation assumes the mortgage,and no gain is recognized on the transfer under Sec.351.The transfer of the liabilities has no effect on the shareholder's stock basis.

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(True/False)

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Question 1

Correct Answer:

Verified

False

A corporation realizes a NSTCL this year of $43,000.It will only be able to deduct $3,000 this year.

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(True/False)

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Question 2

Correct Answer:

Verified

False

The books and records of Finton Corporation,an accrual method taxpayer,reflect the following: Taxable income per return \ 400,000 Tax -exempt interest received 2,500 Federal income tax 84,000 Net capital losses 4,000 Charitable contributions exceeding ceiling 2,000 Dividends-received deduction claimed 40,000 Fines and penalties 10,000 Based on the above,what is the amount of Greg Corporation's current earnings and profits for this year?

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Question 3

Correct Answer:

Verified

$\begin{array} { | l | r | r | } \hline \text { Taxable income per retuin } & & \$ 400,000 \\\hline \text { Plus: } & & \\\hline \text { Tax-exempt interest received } & \$ 2,500 & \\\hline \text { Dividends-received deduction } & & \\\text { claimed } & \underline { 40,000 } & 42,500 \\\hline \text { Less: } & & \\\hline \text { Federal income tax } & 84,000 & \\\hline \text { Excess capital losses } & 4,000 & \\\hline \text { Excess contributions } & 2,000 & \\\hline \text { Fines and penalties } & \underline { 10,000 } & ( 100,000 ) \\\hline \text { Current year E\&P } & & \$ 342,500 \\\hline\end{array}$

Individuals Rhett and Scarlet form Lady Corporation.Rhett transfers land and a building with a $140,000 adjusted basis and a $230,000 FMV in exchange for 50% of the stock of Lady Corporation worth $210,000 and a $20,000 note.Scarlet contributes cash of $230,000 for 50% of the stock of Lady Corporation worth $210,000 and a note of the Lady Corporation valued at $20,000.Rhett's recognized gain on the transfer is

(Multiple Choice)

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Question 4

A corporation distributes land worth $200,000 to its sole shareholder.The corporation had purchased the land several years ago for $120,000.The corporation has over $1 million of E&P.How much income will the corporation and the shareholder recognize?

(Multiple Choice)

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Question 5

Individuals Julie and Brandon form JB Corporation.Julie transfers cash of $425,000 in exchange for 50% of the stock of the JB Corporation worth $410,000 and a $15,000 note.Brandon transfers equipment with a $390,000 adjusted basis and a $425,000 FMV for 50% of the stock worth $410,000 and a note of the JB Corporation valued at $15,000.Brandon's basis in the stock received is

(Multiple Choice)

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Question 6

In order for the Sec.351 nonrecognition rules to apply,the transferor-shareholders in aggregate must control the transferee corporation by owning more than 50% of its stock immediately after the exchange.

(True/False)

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Question 7

DEF Corporation and MNO Corporation are both C corporations.To date,DEF has earned $100,000 of taxable income,and MNO has earned $500,000.Each corporation expects to earn another $100,000 of taxable income before year-end.MNO will pay more tax on its incremental $100,000 of taxable income than will MNO.

(True/False)

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Question 8

One requirement of a personal holding company is that more than 50% of the value of the outstanding stock must be owned by five or fewer individuals at some time during the last 6 months of the tax year.

(True/False)

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Question 9

Smith Corporation,a U.S.C corporation,owns 25% of Avanti Corporation,an Italian corporation that earns all of its income in Europe.Smith Corporation will not be allowed a deduction for dividends received from Avanti.

(True/False)

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Question 10

June Corporation has the following income and expense items during the current year: Net loss from operations (\ 140,000) Dividends received 25\% owned corporations 240,000 The allowed dividends-received deduction is

(Multiple Choice)

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Question 11

Ron transfers assets with a $100,000 FMV (basis $60,000)and $70,000 of business-related liabilities to a corporation in exchange for 100% of the corporation's stock with a FMV of $30,000.The corporation assumes the $70,000 mortgage.The transfer qualifies under Sec.351.What is the adjusted basis of the stock received?

(Multiple Choice)

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Question 12

The term "thin capitalization" means that the corporation is financed primarily with capital stock rather than debt.

(True/False)

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Question 13

Corporations that are members of a parent-subsidiary affiliated group may file a consolidated return if the proper election is made.

(True/False)

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Question 14

A corporation generates a net operating loss of $90,000 in 2018.The corporation's 2019 taxable income from 2019 activities is $95,000.The corporation will be able to deduct the $90,000 net operating loss in 2019.

(True/False)

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Question 15

Peter transfers an office building into a new corporation in exchange for 100 percent of the stock.In addition,the corporation assumes the mortgage on the building.Peter will treat the debt relief as boot and have to recognize gain.

(True/False)

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Question 16

A liquidating corporation

(Multiple Choice)

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Question 17

All of the following are accurate statements about corporations,except

(Multiple Choice)

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Question 18

A corporation distributes land with a FMV of $85,000 (basis $50,000).The land has a mortgage of $95,000 assumed by the shareholder.Gain to the corporation is

(Multiple Choice)

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Question 19

Which of the following statements is correct regarding a corporation's obligation to make quarterly estimated tax payments?

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Question 20

Exam 32: Corporations

A shareholder transfers a building subject to a mortgage in a Sec.351 transfer.The corporation assumes the mortgage,and no gain is recognized on the transfer under Sec.351.The transfer of the liabilities has no effect on the shareholder's stock basis.

A corporation realizes a NSTCL this year of $43,000.It will only be able to deduct $3,000 this year.

A corporation distributes land worth $200,000 to its sole shareholder.The corporation had purchased the land several years ago for $120,000.The corporation has over $1 million of E&P.How much income will the corporation and the shareholder recognize?

In order for the Sec.351 nonrecognition rules to apply,the transferor-shareholders in aggregate must control the transferee corporation by owning more than 50% of its stock immediately after the exchange.

One requirement of a personal holding company is that more than 50% of the value of the outstanding stock must be owned by five or fewer individuals at some time during the last 6 months of the tax year.

Smith Corporation,a U.S.C corporation,owns 25% of Avanti Corporation,an Italian corporation that earns all of its income in Europe.Smith Corporation will not be allowed a deduction for dividends received from Avanti.

June Corporation has the following income and expense items during the current year: Net loss from operations (\ 140,000) Dividends received 25\% owned corporations 240,000 The allowed dividends-received deduction is

The term "thin capitalization" means that the corporation is financed primarily with capital stock rather than debt.

Corporations that are members of a parent-subsidiary affiliated group may file a consolidated return if the proper election is made.

A corporation generates a net operating loss of $90,000 in 2018.The corporation's 2019 taxable income from 2019 activities is $95,000.The corporation will be able to deduct the $90,000 net operating loss in 2019.

Peter transfers an office building into a new corporation in exchange for 100 percent of the stock.In addition,the corporation assumes the mortgage on the building.Peter will treat the debt relief as boot and have to recognize gain.

A liquidating corporation

All of the following are accurate statements about corporations,except

A corporation distributes land with a FMV of $85,000 (basis $50,000).The land has a mortgage of $95,000 assumed by the shareholder.Gain to the corporation is

Which of the following statements is correct regarding a corporation's obligation to make quarterly estimated tax payments?

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