Exam 11: The Corporate Taxpayer

Which of the following statements regarding the rehabilitation credit is false?

The only alternative to double taxation of corporate earnings is to treat corporations as passthrough entities,similar to partnerships.

In its first taxable year,Platform,Inc.generated a $100,000 net operating loss and made a $10,000 cash donation to a local charity.In its second year,Platform generated $350,000 operating income and made a $20,000 donation to the same charity.Compute Platform's taxable income for its second year.

For distributions prior to 2018,dividends-received deductions generally are not allowed for dividends from foreign corporations.

Borough,Inc.is entitled to a rehabilitation credit of $500,000 for its current tax year.The corporation's regular tax liability is $450,000.No estimated tax payments have been made.Which of the following statements is true?

A significant advantage of issuing stock instead of debt financing is that payment of dividends is discretionary.

What is the extended due date of the federal income tax return of a corporation with a tax year ended June 30,2019?

Palm Corporation has book income of $424,000.Book income reflects $130,000 federal income tax expense and $55,000 depreciation expense.Tax depreciation expense computed under MACRS is $65,000.Palm received $25,000 of prepaid rent not included in book income.Based only on these items,compute Palm's taxable income.

Which of the following is a primary legal characteristic of the corporate form of business?

For a consolidated group of corporations,Schedule M-3 reconciles worldwide financial statement net income to the financial statement net income of those corporations permitted to be included in the U.S.consolidated tax return group.

Mandrake,Inc.has book income of $569,300.Its income includes a $50,700 bad debt expense,determined by the allowance method.Actual write offs this year were $48,000.Based only on this information,compute Mandrake's taxable income.

Corporations with less than $1 million of taxable income are not required to make quarterly estimated tax payments.

Which of the following statements regarding Schedule M-1 is true?

With the exception of corporations whose fiscal year ends on June 30 and for tax years beginning after December 31,2015,which of the following statements regarding corporate tax filing requirements is false?

The burden of corporate taxation is often borne by corporate shareholders,customers,employees,and suppliers.

Sonic Corporation has a 21% marginal tax rate and received $10,000 of dividends from Roller,Inc.,a U.S.corporation in which Sonic owns less than 2% of the outstanding stock.Sonic's effective tax rate on the Roller dividend is:

Corporations report their taxable income and calculate the federal income tax on Form 1040.

Hearth,Inc.reported $30,000 of depreciation expense on its financial statements.For federal income tax purposes,it deducted depreciation of $35,000.This book/tax difference would result in an increase to net income per books on the Schedule M-1 or M-3.

The dividends-received deduction is equal to 65% of any dividends-received by a corporate taxpayer.

Harmon,Inc.was incorporated and began business on January 1,2018.Its tax liability for 2018 was $36,000.Its tax liability for 2019 was $50,000.Which of the following is a correct statement concerning the payment of estimated taxes for 2019?