Question 1

Which of the following is a means to avoid the double taxation burden imposed on the profits of corporations?

Accepted Answer

A) Treat all corporations as passthrough entities for federal tax purposes. 
B) Enact tax legislation that would make dividends nontaxable to all of the corporation's shareholders. 
C) Allow corporate shareholders a credit on their tax returns for the taxes paid by the corporation on the profits currently distributed to shareholders as dividends. 
D) All of the above would avoid double taxation. 
A) Treat all corporations as passthrough entities for federal tax purposes. 
B) Enact tax legislation that would make dividends nontaxable to all of the corporation's shareholders. 
C) Allow corporate shareholders a credit on their tax returns for the taxes paid by the corporation on the profits currently distributed to shareholders as dividends. 
D) All of the above would avoid double taxation.

Question 2

A corporation with a June 30 fiscal year earns $1 million for its tax year ended June 30,2018.Regular tax liability on this income is $210,000.

Accepted Answer

A) True 
 B)False

Question 3

Eagle,Inc.made a contribution to the Boy Scouts of $25,000 during its current tax year.The corporation's taxable income before any charitable contribution deduction was $200,000.The corporation has a current charitable contribution deduction of $25,000.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements regarding Schedule M-3 is false?

Accepted Answer

A) The IRS developed Schedule M-3 with the goal of increasing transparency between reported net income for financial accounting purposes and reported net income for tax purposes. 
B) Schedule M-3 reports the temporary versus permanent characterization of book-tax differences. 
C) Part I of 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. 
D) Schedule M-3 replaces Schedule M-1 for all tax years beginning after December 31,2004. 
A) The IRS developed Schedule M-3 with the goal of increasing transparency between reported net income for financial accounting purposes and reported net income for tax purposes. 
B) Schedule M-3 reports the temporary versus permanent characterization of book-tax differences. 
C) Part I of 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. 
D) Schedule M-3 replaces Schedule M-1 for all tax years beginning after December 31,2004.

Question 5

The purpose of Schedule M-1 is to explain the differences between financial statement income and taxable income.

Accepted Answer

A) True 
 B)False

Question 6

Slipper Corporation has book income of $500,000.Book income includes a $50,000 gain on the sale of equipment.The equipment originally cost $110,000 and was sold for $75,000.Accumulated book depreciation was $85,000; accumulated MACRS depreciation was $90,000.Based only on these items,compute Slipper's taxable income.

Accepted Answer

A) $505,000 
B) $495,000 
C) $555,000 
D) $445,000 
A) $505,000 
B) $495,000 
C) $555,000 
D) $445,000

Question 7

Forward Inc.'s book income of $739,000 includes a net long-term capital loss of $42,000 and charitable contribution of $170,000.Taxable income shown on the Schedule M-1 would be:

Accepted Answer

A) $855,900 
B) $951,000 
C) $781,000 
D) $909,000 
A) $855,900 
B) $951,000 
C) $781,000 
D) $909,000

Question 8

A nonprofit corporation may incur a federal income tax if it has unrelated business income.

Accepted Answer

A) True 
 B)False

Question 9

Corporations with more than $1 million taxable income must pay 100% of their current federal income tax liability in the form of quarterly estimate payments to avoid an underpayment penalty.

Accepted Answer

A) True 
 B)False

Question 10

Generally,the corporate income tax is computed using a regressive rate schedule.

Accepted Answer

A) True 
 B)False

Question 11

After 2017,a 37% excise tax applies to compensation in excess of $1 million paid to executives of tax-exempt organizations.

Accepted Answer

A) True 
 B)False

Question 12

John's,Inc.manufactures and sells fine furniture.What is John's regular tax liability if it had taxable income of $40,000,000 for its fiscal year ended September 30,2018?

Accepted Answer

A) $14,000,000 
B) $9,800,000 
C) $8,400,000 
D) $11,200,000 
A) $14,000,000 
B) $9,800,000 
C) $8,400,000 
D) $11,200,000

Question 13

Donatoni Corporation owns 40% of Market,Inc.voting common stock.During the current year,Donatoni received a $30,000 dividend from Market.Donatoni must report the dividend as gross income,and is allowed a $15,000 dividends-received deduction.

Accepted Answer

A) True 
 B)False

Question 14

A corporation that owns more than $10 million of total assets uses which schedule to reconcile book income to taxable income?

Accepted Answer

A) Schedule M-1 
B) Schedule M-2 
C) Schedule M-3 
D) Schedule M-4 
A) Schedule M-1 
B) Schedule M-2 
C) Schedule M-3 
D) Schedule M-4

Question 15

TasteCo,Inc.reported $210,500 of taxable income this year.What is its regular tax liability?

Accepted Answer

A) $44,205 
B) $65,345 
C) $54,775 
D) $71,570 
A) $44,205 
B) $65,345 
C) $54,775 
D) $71,570

Which of the following is a means to avoid the double taxation burden imposed on the profits of corporations?

A corporation with a June 30 fiscal year earns $1 million for its tax year ended June 30,2018.Regular tax liability on this income is $210,000.

Eagle,Inc.made a contribution to the Boy Scouts of $25,000 during its current tax year.The corporation's taxable income before any charitable contribution deduction was $200,000.The corporation has a current charitable contribution deduction of $25,000.

Which of the following statements regarding Schedule M-3 is false?

The purpose of Schedule M-1 is to explain the differences between financial statement income and taxable income.

Forward Inc.'s book income of $739,000 includes a net long-term capital loss of $42,000 and charitable contribution of $170,000.Taxable income shown on the Schedule M-1 would be:

A nonprofit corporation may incur a federal income tax if it has unrelated business income.

Corporations with more than $1 million taxable income must pay 100% of their current federal income tax liability in the form of quarterly estimate payments to avoid an underpayment penalty.

Generally,the corporate income tax is computed using a regressive rate schedule.

After 2017,a 37% excise tax applies to compensation in excess of $1 million paid to executives of tax-exempt organizations.

John's,Inc.manufactures and sells fine furniture.What is John's regular tax liability if it had taxable income of $40,000,000 for its fiscal year ended September 30,2018?

Donatoni Corporation owns 40% of Market,Inc.voting common stock.During the current year,Donatoni received a $30,000 dividend from Market.Donatoni must report the dividend as gross income,and is allowed a $15,000 dividends-received deduction.

A corporation that owns more than $10 million of total assets uses which schedule to reconcile book income to taxable income?

TasteCo,Inc.reported $210,500 of taxable income this year.What is its regular tax liability?

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, partnerships, llcs, and S Corporations

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters

Exam 11: The Corporate Taxpayer

Which of the following is a means to avoid the double taxation burden imposed on the profits of corporations?

A corporation with a June 30 fiscal year earns $1 million for its tax year ended June 30,2018.Regular tax liability on this income is $210,000.

Eagle,Inc.made a contribution to the Boy Scouts of $25,000 during its current tax year.The corporation's taxable income before any charitable contribution deduction was $200,000.The corporation has a current charitable contribution deduction of $25,000.

Which of the following statements regarding Schedule M-3 is false?

The purpose of Schedule M-1 is to explain the differences between financial statement income and taxable income.

Forward Inc.'s book income of $739,000 includes a net long-term capital loss of $42,000 and charitable contribution of $170,000.Taxable income shown on the Schedule M-1 would be:

A nonprofit corporation may incur a federal income tax if it has unrelated business income.

Corporations with more than $1 million taxable income must pay 100% of their current federal income tax liability in the form of quarterly estimate payments to avoid an underpayment penalty.

Generally,the corporate income tax is computed using a regressive rate schedule.

After 2017,a 37% excise tax applies to compensation in excess of $1 million paid to executives of tax-exempt organizations.

John's,Inc.manufactures and sells fine furniture.What is John's regular tax liability if it had taxable income of $40,000,000 for its fiscal year ended September 30,2018?

Donatoni Corporation owns 40% of Market,Inc.voting common stock.During the current year,Donatoni received a $30,000 dividend from Market.Donatoni must report the dividend as gross income,and is allowed a $15,000 dividends-received deduction.

A corporation that owns more than $10 million of total assets uses which schedule to reconcile book income to taxable income?

TasteCo,Inc.reported $210,500 of taxable income this year.What is its regular tax liability?

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, partnerships, llcs, and S Corporations

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters