Question 1

Identify which of the following statements is true.

Accepted Answer

A)  Unamortized organizational expenses cannot be deducted when the corporation is liquidated. 
B)  Organizational expenditures incurred by a corporation do not include the cost of accounting services necessary to create the corporation. 
C)  Organizational expenditures incurred by a corporation do not include the cost of printing stock. 
D)  All of the above are false. 
A)  Unamortized organizational expenses cannot be deducted when the corporation is liquidated. 
B)  Organizational expenditures incurred by a corporation do not include the cost of accounting services necessary to create the corporation. 
C)  Organizational expenditures incurred by a corporation do not include the cost of printing stock. 
D)  All of the above are false.

Question 2

West Corporation purchases 50 shares (less than 1%) of Perch Corporation common stock on April 3. The ex- dividend date is April 4. West Corporation pays $50,000 for the stock and receives a dividend of $5,000 on the Perch stock. On May 1, West Corporation sells the Perch stock for
$45,000. West's taxable income before the dividends- received deduction is $4,000. West's dividends- received deduction is

Accepted Answer

A)  $2,800. 
B)  $3,500. 
C)  $0. 
D)  $3,200. 
A)  $2,800. 
B)  $3,500. 
C)  $0. 
D)  $3,200.

Question 3

How does the use of an NOL differ for individual and corporate taxpayers?

Accepted Answer

An individual must make adjust

Question 4

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 5

Identify which of the following statements is true.

Accepted Answer

A)  A corporation with gross receipts, total income, and total assets of $1,000,000 or less is permitted to file Form 1120- A. 
B)  A corporation is required to file a tax return even if it has no taxable income. 
C)  A corporate tax return must be filed by the fifteenth day of the fourth month following the close of the corporation's tax year. 
D)  All of the above are false. 
A)  A corporation with gross receipts, total income, and total assets of $1,000,000 or less is permitted to file Form 1120- A. 
B)  A corporation is required to file a tax return even if it has no taxable income. 
C)  A corporate tax return must be filed by the fifteenth day of the fourth month following the close of the corporation's tax year. 
D)  All of the above are false.

Question 6

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)  A corporate dividends- received deduction is not allowed for dividends received on stock held for 40 days. 
C)  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. 
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)  A corporate dividends- received deduction is not allowed for dividends received on stock held for 40 days. 
C)  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. 
D)  All of the above are false.

Question 7

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

Question 8

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 9

Jackel, Inc. has the following information for the current tax year: $\begin{array}{lr}
\text { Gross sales } & \$ 350,000 \
\text { Cost of goods sold } & 50,000 \
\text { Dividends reoived (10\%) } & 40,000 \
\text { Operating expenses } & 30,000 \
\text { Charitable contributions } & 45,000
\end{array}$ What is Jackel's charitable contribution deduction? What is Jackel's taxable income?

Accepted Answer

@#IMG-DLM& The 10% charitable contributi

Question 10

Identify which of the following statements is true.

Accepted Answer

A)  At the election of a corporation, a net capital loss carryback can be forgone and carried forward only. 
B)  Corporate capital loss carrybacks can offset corporate ordinary income earned in previous years. 
C)  A corporate capital loss can be carried back three years, and then can be carried forward five years. 
D)  All of the above are false. 
A)  At the election of a corporation, a net capital loss carryback can be forgone and carried forward only. 
B)  Corporate capital loss carrybacks can offset corporate ordinary income earned in previous years. 
C)  A corporate capital loss can be carried back three years, and then can be carried forward five years. 
D)  All of the above are false.

Question 11

Miller Corporation has gross income of $100,000, which includes $60,000 of dividends from a 10%- owned corporation. In addition, Miller has $80,000 of expenses. Miller's taxable income or loss is

Accepted Answer

A)  $0. 
B)  ($10,000). 
C)  $20,000. 
D)  $6,000. 
A)  $0. 
B)  ($10,000). 
C)  $20,000. 
D)  $6,000.

Question 12

Dallas Corporation, not a dealer in securities, realizes taxable income of $60,000 from the operation of its business. Additionally, in the same year, Dallas realizes a long- term capital loss of $10,000 from the sale of marketable securities. If the corporation realizes no other capital gains or losses, what is the proper treatment for the $10,000 long- term capital loss on the tax return?
A) Carry the $10,000 long- term capital loss back three years as a short- term capital loss, then forward five years.
B) Use $6,000 of the loss to reduce taxable income and carry $4,000 of the long- term capital loss forward for five years.
C) Use $10,000 of the long- term capital loss to reduce taxable income.
D) Use $3,000 of the loss to reduce taxable income and carry $7,000 of the long- term capital loss forward for five years.

Accepted Answer

The answer of Dallas Corporation, not a dealer in securities,...

Question 13

What are start- up expenditures?

Accepted Answer

Start- up expenditures usually

Question 14

Sun and Moon Corporations each have only one class of stock outstanding. Their stock ownership is shown below. $$\begin{array} { | c | c | c | } 
\hline \text { Shareholder } & \text { Sun Corporation } & \text { Moon Corporation } \
\hline \text { Arthur } & 50 \% & 60 \% \
\text { Brenda } & 20 \% & 40 \% \
\text { Charles } & 30 \% & 0 \% \
\text { David } & 0 \% & 0 \% \
\hline
\end{array}$$ Which of the four stock ownership changes that are illustrated is the minimum change that is neede and Moon Corporations are to be brother- sister corporations under the 50%- 80% requirements? (Assume the two corporations are equally valued.) 
A) No stock ownership change is required.
B) Arthur must acquire an additional 30% of Moon Corporation.
C) Charles must acquire an additional 10% of Moon Corporation.
D) Charles must acquire an additional 5% of Sun Corporation.

Accepted Answer

Five or fewer individuals own at least 8

Question 15

The following expenses are incurred by Salter Corporation when it is organized on July 1: $\begin{array}{ll}
\text {Attorney fees to draft charter }&\$20,000\
\text { Underwriter fees for stock sale}&10,000\
\text {Transfer cost for property contributed to the corporation for stock  }&4,000\
\text {Costs of organizational meetings before beginning business  }&5,000\
\text {Costs of directors' meetings after beginning business }&8,000\
\end{array}$
 Salter commenced business on September 8. What is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending December 31?

Accepted Answer

($20,000 + $5,000) = $25,000 t

Question 16

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

Accepted Answer

Filing consolidated returns al

Question 17

Little Corporation uses the accrual method of accounting. Little's sole shareholder, Renee, uses the cash method of accounting. Both taxpayers use the calendar year as their tax year. The corporation accrues a $25,000 interest payment to Renee on December 25, 2011 and makes the payment on March 10, 2012. What are the tax consequences of the transactions to both taxpayers in 2011 and 2012?

Accepted Answer

Little Corporation cannot dedu

Question 18

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 19

Corporations may carry charitable contributions in excess of the income limitation forward for five years.

Accepted Answer

A) True 
 B)False

Question 20

Sun and Moon Corporations each have only one class of stock outstanding. Their stock ownership is shown below. $$\begin{array} { | c | c | c | } 
\hline \text { Shareholder } & \text { Sun Corporation } & \text { Moon Corporation } \
\hline \text { Arthur } & 50 \% & 60 \% \
\text { Brenda } & 20 \% & 40 \% \
\text { Charles } & 30 \% & 0 \% \
\text { David } & 0 \% & 0 \% \
\hline
\end{array}$$ Which of the four stock ownership changes that are illustrated is the minimum change that is neede and Moon Corporations are to be brother- sister corporations under the 50% requirements? (Assume the two corporations are equally valued.)

Accepted Answer

A)  No stock ownership change is required. 
B)  Arthur sells his 2/3rds of his shares to David. 
C)  Arthur sells 4/5ths of his shares in Sun to David. 
D)  Arthur must acquire an additional 30% of Moon Corporation. 
A)  No stock ownership change is required. 
B)  Arthur sells his 2/3rds of his shares to David. 
C)  Arthur sells 4/5ths of his shares in Sun to David. 
D)  Arthur must acquire an additional 30% of Moon Corporation.

Identify which of the following statements is true.

How does the use of an NOL differ for individual and corporate taxpayers?

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

Identify which of the following statements is true.

Identify which of the following statements is false.

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

Jackel, Inc. has the following information for the current tax year: Gross sales \ 350,000 Cost of goods sold 50,000 Dividends reoived (10\%) 40,000 Operating expenses 30,000 Charitable contributions 45,000 What is Jackel's charitable contribution deduction? What is Jackel's taxable income?

Identify which of the following statements is true.

Miller Corporation has gross income of $100,000, which includes $60,000 of dividends from a 10%- owned corporation. In addition, Miller has $80,000 of expenses. Miller's taxable income or loss is

What are start- up expenditures?

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

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?

Corporations may carry charitable contributions in excess of the income limitation forward for five years.

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

U.S. Taxation of Foreign-Related Transactions

Filters

Exam 3: The Corporate Income Tax

Identify which of the following statements is true.

How does the use of an NOL differ for individual and corporate taxpayers?

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

Identify which of the following statements is true.

Identify which of the following statements is false.

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

Jackel, Inc. has the following information for the current tax year: Gross sales \ 350,000 Cost of goods sold 50,000 Dividends reoived (10\%) 40,000 Operating expenses 30,000 Charitable contributions 45,000 What is Jackel's charitable contribution deduction? What is Jackel's taxable income?

Identify which of the following statements is true.

Miller Corporation has gross income of $100,000, which includes $60,000 of dividends from a 10%- owned corporation. In addition, Miller has $80,000 of expenses. Miller's taxable income or loss is

What are start- up expenditures?

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

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?

Corporations may carry charitable contributions in excess of the income limitation forward for five years.

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

U.S. Taxation of Foreign-Related Transactions

Filters