Exam 32: Corporations

Daniel transfers land with a $92,000 adjusted basis and a $100,000 FMV to a corporation in a Sec.351 transfer.Immediately after the transfer,Daniel owns 100% of the corporation-stock with a FMV of $15,000.In addition,$85,000 of business-related liabilities are assumed by the corporation with respect to the transfer.No other property is transferred.Daniel's basis in the stock is

Atomic Corporation is enjoying a very profitable year.The board of directors is considering paying either a bonus to the president of the corporation or an extra dividend to the shareholder.Shinil is both the president and the 100% shareholder.Which of the following statements is generally correct with respect to closely held corporations in Atomic's position?

For corporations,both NLTCLs and NSTCLs are eligible for a 3-year carryback and a 5-year carryforward as an offset against capital gains for those years.

Bob 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 Bob's gain recognized on the transfer?

A corporation redeems 10 percent of the stock of each shareholder in a family-owned corporation.The shareholders will recognize capital gains on the sale of their stock back to the corporation.

Indicators of possible exposure of accumulated earning tax risk would include all of the following except

Charades Corporation is a publicly held company listed on the New York Stock Exchange.During the current year,its chief executive officer,Samantha Chen,receives the following compensation from the corporation: salary,$1,500,000; commissions based on sales generated by Samantha,$200,000; payments to a qualified pension plan,$30,000; and tax-free fringe benefits,$20,000.What is the total amount that Charades may deduct?

If a corporation distributes appreciated property to its shareholders,the corporation will recognize any realized gain.

Star Corporation,in complete liquidation,makes distributions to its two shareholders.Tim surrenders his Star stock (adjusted basis of $70,000)to the corporation in exchange for land with a $90,000 adjusted basis and a $100,000 FMV.Lindsey receives $100,000 cash for her shares (adjusted basis $110,000).What is the amount of gains and or losses recognized by Tim and Lindsey as a result of these transactions?

Individuals Gayle and Marcus form GM Corporation.Gayle transfers land and a building with a $750,000 adjusted basis and a $830,000 FMV in exchange for 50% of the stock of the GM Corporation worth $800,000 and a $30,000 note.Marcus transfers cash of $830,000 for 50% of the stock worth $800,000 and a note of the GM Corporation valued at $30,000.The basis of the land and building to GM Corporation is

A corporation has the following capital gains and losses during the current year: LTCG: \ 25,000 LTCL: 15,000 STCG: 8,000 STCL: 4,000 The tax result to the corporation is

Tara transfers land with a $690,000 adjusted basis and a $700,000 FMV to a corporation in a Sec.351 transfer.Immediately after the transfer,Tara owns 100% of the corporation-stock with a FMV of $615,000.In addition,$85,000 of business-related liabilities are assumed by the corporation with respect to the transfer.No other property is transferred.Tara's recognized gain on the transfer is

Danielle transfers land with a $100,000 FMV (basis $95,000)and $85,000 of business-related liabilities to a corporation in exchange for 100% of the corporation's stock with a FMV of $15,000.The corporation qualifies as a 351 transfer.The corporation assumes the $85,000 mortgage.What is the adjusted basis of the property to the corporation?

Individuals Opal and Ben form OB Corporation.Opal transfers land and a building with a $550,000 adjusted basis and a $625,000 FMV in exchange for 50% of the stock of the OB Corporation worth $610,000 and a $15,000 note.Ben transfers cash of $625,000 for 50% of the stock worth $610,000 and a note of the OB Corporation valued at $15,000.Opal's basis in the stock received is

A new start-up corporation is formed by three individuals.They expect the corporation will experience losses in its first few years.The shareholders will prefer to have the corporation taxed as a C corporation rather than making an S election.

A corporation has a tax year ending December 31,2019.When is the due date for the corporate income tax return (with no extensions)?

A corporation's E&P is equal to its taxable income for the year.

Individuals Bert and Tariq form Shark Corporation.Bert transfers equipment with a $290,000 adjusted basis and a $335,000 FMV for 50% of the stock worth $310,000 and a note of Shark Corporation valued at $25,000.Tariq transfers cash of $335,000 in exchange for 50% of the stock of Shark Corporation worth $310,000 and a $25,000 note.Bert's recognized gain is

Montrose Corporation is classified as a personal holding company.It is almost year-end.The company's taxable income and regular federal income tax liability are expected to be $100,000 and $21,000,respectively.The company will claim a $20,000 dividends-received deduction and earlier in the year paid $25,000 of dividends to its shareholders.How much in additional dividends must be paid to shareholders in order to avoid the personal holding company tax?

Tara transfers land with a $600,000 adjusted basis and a $700,000 FMV to a corporation in a Sec.351 transfer.Immediately after the transfer,Tara owns 100% of the corporation-stock with a FMV of $660,000.In addition,Tara's $40,000 principal balance on her student loan is legally assumed by the corporation as part of the overall transfer.No other property is transferred.Tara's recognized gain on the transfer is