Exam 3: The Corporate Income Tax

Grant Corporation is not a large corporation for estimated tax purposes and reports on a calendar- year basis. Grant expects the following results: Regular tax \ 248,000 Alternative minimum tax Total tax due \ 288,000 Grant's tax liability for last year was $240,000. Grant's minimum total estimated tax payment for this avoid a penalty is

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

You are the CPA who prepares the tax returns for Dudley, his wife Margo, and their two corporations. Dave owns 100% of Duright Corporation's stock. Duright's current- year taxable income is $100,000. Margo owns 100% of Northwest Corporation's stock. Northwest's current- year taxable income is $150,000. Dudley and Margo file a joint federal income tax return. What issues should be considered with respect to the calculation of the three tax return liabilities?

Dexter Corporation reports the following results for the current year: Gross income from operations \ 90,000 Dividends from less than 20\% - owned corporations 50,000 Operating expenses 75,000 Charitable contributions 10,000 In addition, Dexter has a $25,000 NOL carryover from the preceding tax year. What is Dexter's taxable income fo current year?

Organizational expenditures include all of the following except for

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

Bright Corporation purchased residential real estate five years ago for $450,000, of which $50,000 was allocated to the land and $400,000 was allocated to the building. Bright booked straight- line MACRS deductions of $55,000 during the past five years. This year, Bright sells the property for $550,000, of which $100,000 is allocated to the land and $450,000 is allocated to the building. What is the amount and character of Bright's recognized gain or loss on the sale?

James Corporation purchased residential real estate in 2012 for $225,000, of which $25,000 was allocated to land and $200,000 was allocated to the building. James Corporation took straight- line MACRS deductions of $30,000 during the years 2012- 2017. In 2018, James Corporation sold the property for $285,000, of which $60,000 is allocated to the land and $225,000 is allocated to the building. What are the amounts and character of James Corporation's recognized gain or loss on the sale?

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.

On December 10, 2018, Dell Corporation (a calendar- year taxpayer) accrues 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, 2019. What is Dell's deduction for 2018? What is Dell's deduction for 2019?

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: Date Type Amount 6-30 Attorney's fees associated with obtaining charter \ 10,000 7-10 Underwriter fees for stock sale 25,000 7-15 Transfer cost for property contributed to the corporation for stock 3,000 6-30 Costs of organizational meetings 2,000 12-6 Legal fees to modify charter 4,000 What is the maximum amount of organizational expenditures that can be deducted by the corporati its first tax year ending November 30?

Which of the following items is a temporary difference between tax income and financial accounting income?

During the year, Soup Corporation contributes some of its inventory to a qualified charity for use in feeding the needy. The inventory has an FMV of $85,000 and an adjusted basis of $25,000. What is the amount of Soup Corporation's charitable contribution deduction for the donation of the inventory as determined without regard to the overall charitable contribution limitation?

Identify which of the following statements is true.

Chambers Corporation is a calendar year taxpayer using the accrual method of accounting. In 2018, its board of directors authorizes a $20,000 contribution to the Boy Scouts. Chambers pays the contribution on March 12, 2019. What is the maximum contribution allowed in 2018? What is the maximum contribution allowed in 2019?

Identify which of the following statements is false.

Identify which of the following statements is true.

Which of the following results in a deferred tax asset?

Bishop Corporation reports taxable income of $700,000 on its tax return. Given the following inform from the corporation's records, determine Bishop's net income per its financial accounting records. Deduction for federal income taxes per books \ 240,000 Depreciation claimed on the tax return 135,000 Depreciation reported on the financial accounting books 75,000 Life insurance proceeds on death of a corporate officer 100,000

Francine Corporation reports the following income and expense items for the tax year ending December 31: Gross receipts from sales \ 50,000 Dividends reoived from 15\% - owned domestic corporation 30,000 Expenses connected with sales 20,000 What is Francine Corporation's taxable income?