Question 1

Identify which of the following statements is true.

Accepted Answer

A)  The full 65% dividends- received deduction is available without restriction. 
B)  The dividends- received deduction is designed to reduce double taxation of corporate dividends. 
C)  If a corporation receives dividends eligible for the 65% dividends- received deduction and the 50% dividends- received deduction, the 50% dividends- received deduction reduces taxable income prior to the 65% deduction. 
D)  All of the above are false. 
A)  The full 65% dividends- received deduction is available without restriction. 
B)  The dividends- received deduction is designed to reduce double taxation of corporate dividends. 
C)  If a corporation receives dividends eligible for the 65% dividends- received deduction and the 50% dividends- received deduction, the 50% dividends- received deduction reduces taxable income prior to the 65% deduction. 
D)  All of the above are false. B

Question 2

If a corporation's charitable contributions exceed the deduction limitation in a particular year, the excess

Accepted Answer

A)  may be carried back to the third preceding year. 
B)  is not deductible in any future year. 
C)  is carried over indefinitely. 
D)  becomes a carryover to a maximum of five succeeding years. 
A)  may be carried back to the third preceding year. 
B)  is not deductible in any future year. 
C)  is carried over indefinitely. 
D)  becomes a carryover to a maximum of five succeeding years. D

Question 3

Identify which of the following statements is true.

Accepted Answer

A)  Accrued compensation not paid within three and one- half months after the close of the corporation tax year is deducted in the year following the accrual. 
B)  Accrued compensation that is deductible in the year of accrual is considered to be part of an IRS deferred compensation plan. 
C)  A corporation that accrues compensation payable to an employee must pay the amount within two and one- half months after the close of the taxable year to deduct the amount in the year of the accrual. 
D)  All of the above are false. 
A)  Accrued compensation not paid within three and one- half months after the close of the corporation tax year is deducted in the year following the accrual. 
B)  Accrued compensation that is deductible in the year of accrual is considered to be part of an IRS deferred compensation plan. 
C)  A corporation that accrues compensation payable to an employee must pay the amount within two and one- half months after the close of the taxable year to deduct the amount in the year of the accrual. 
D)  All of the above are false. C

Question 4

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?

Accepted Answer

Soup Corporation can claim a $50,000 ded

Question 5

Beta Corporation recently purchased 100% of XYZ Corporation stock. You are their CPA. What tax issues need to be addressed before determining whether or not to file a consolidated tax return?

Accepted Answer

• Does either Beta or XYZ have losses?
•

Question 6

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?

Accepted Answer

The maximum allowable in 2018 is $20,000

Question 7

Baxter Corporation is a personal service corporation. Baxter Corporation has taxable income of $10,000. Baxter Corporation's tax is

Accepted Answer

A)  $2,900. 
B)  $2,100. 
C)  $1,500. 
D)  $2,400. 
A)  $2,900. 
B)  $2,100. 
C)  $1,500. 
D)  $2,400.

Question 8

Gilbreath Corporation is a C corporation and has the following items of income and expense during the current   What is taxable income before limitation? What is the net business interest expense? What is adjusted taxable in for purposes of the net business income limitation? How much of the net business interest expense may Gilbreat deduct during the current year?

Accepted Answer

The answer of Gilbreath Corporation is a C corporation and...

Question 9

What are the various levels of stock ownership by corporate shareholders for the dividends- received deduction (DRD)? What is the DRD% for each level of ownership?

Accepted Answer

If a corporate shareholder owns less tha

Question 10

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 11

What are some of the advantages and disadvantages of filing a consolidated return?

Accepted Answer

Advantages include:
1) profits of one me

Question 12

Newco Corporation has asked you to help determine whether it should use the accrual method or the cash method of accounting. What are the tax issues involved in making this determination?

Accepted Answer

• Is Newco a farming corporation?
• If s

Question 13

Identify which of the following statements is true.

Accepted Answer

A)  Domestic Production Activities Deduction carry overs that originated from pre 2018 tax years are limited to 50% of taxable income until 2025. 
B)  Deductibility of business interest in a given year is limited to 80% of adjusted taxable income. 
C)  For expenses incurred after December 31, 2017, no deduction is allowed for any activities involving entertainment, amusement, or recreation, including expenses related to a facility used in connection with these activities. 
D)  The Dividends Received Deduction for individuals is limited to 50%. 
A)  Domestic Production Activities Deduction carry overs that originated from pre 2018 tax years are limited to 50% of taxable income until 2025. 
B)  Deductibility of business interest in a given year is limited to 80% of adjusted taxable income. 
C)  For expenses incurred after December 31, 2017, no deduction is allowed for any activities involving entertainment, amusement, or recreation, including expenses related to a facility used in connection with these activities. 
D)  The Dividends Received Deduction for individuals is limited to 50%.

Question 14

Evans Corporation has a $15,000 net capital loss in 2017. The corporation reported the following cap gain netting in income during the past three years. Identify which of the following statements is true

Accepted Answer

A)  The loss is used to offset the $11,000 of the 2015 gains and then carried back to offset $4,000 of the year 2014 net gain. 
B)  The loss is used to offset $3,000 of 2014 , 2015 and 2016 capital gains, remaining amount carried forward at $3,000 a year until expired. 
C)  The loss is used to offset the year 2014 net gains, then $5,000 of the year 2015 net gains. 
D)  The loss is used to offset the gains from 2016 and then carried back to offset $10,000 of the gains in 2014. 
A)  The loss is used to offset the $11,000 of the 2015 gains and then carried back to offset $4,000 of the year 2014 net gain. 
B)  The loss is used to offset $3,000 of 2014 , 2015 and 2016 capital gains, remaining amount carried forward at $3,000 a year until expired. 
C)  The loss is used to offset the year 2014 net gains, then $5,000 of the year 2015 net gains. 
D)  The loss is used to offset the gains from 2016 and then carried back to offset $10,000 of the gains in 2014.

Question 15

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

Accepted Answer

A)  $20,000. 
B)  $4,000. 
C)  $0. 
D)  $30,000. 
A)  $20,000. 
B)  $4,000. 
C)  $0. 
D)  $30,000.

Question 16

The following expenses are incurred by Salter Corporation when it is organized on July 1:   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 17

Cricket Corporation has a $50,000 NOL in the current year. Cricket does not have pre 2018 NOLs. Cricket expects its taxable income for next year to exceed $40,000. What issues should be considered with respect to the use of the NOL?

Accepted Answer

The primary issue is calculati

Question 18

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

Accepted Answer

A)  $158,250. 
B)  $175,000. 
C)  $105,000. 
D)  $162,200. 
A)  $158,250. 
B)  $175,000. 
C)  $105,000. 
D)  $162,200.

Question 19

Identify which of the following statements is false.

Accepted Answer

A)  A corporation can obtain an automatic six- month extension of time to file its tax return. 
B)  A corporation must file a tax return annually. 
C)  The IRS will permit an extension of time to file a corporate return beyond the original due date only when the corporation's delay is reasonable. 
D)  The IRS can rescind the extension period. 
A)  A corporation can obtain an automatic six- month extension of time to file its tax return. 
B)  A corporation must file a tax return annually. 
C)  The IRS will permit an extension of time to file a corporate return beyond the original due date only when the corporation's delay is reasonable. 
D)  The IRS can rescind the extension period.

Question 20

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

Identify which of the following statements is true.

If a corporation's charitable contributions exceed the deduction limitation in a particular year, the excess

Identify which of the following statements is true.

Beta Corporation recently purchased 100% of XYZ Corporation stock. You are their CPA. What tax issues need to be addressed before determining whether or not to file a consolidated tax return?

Baxter Corporation is a personal service corporation. Baxter Corporation has taxable income of $10,000. Baxter Corporation's tax is

What are the various levels of stock ownership by corporate shareholders for the dividends- received deduction (DRD)? What is the DRD% for each level of ownership?

What are some of the advantages and disadvantages of filing a consolidated return?

Newco Corporation has asked you to help determine whether it should use the accrual method or the cash method of accounting. What are the tax issues involved in making this determination?

Identify which of the following statements is true.

Evans Corporation has a $15,000 net capital loss in 2017. The corporation reported the following cap gain netting in income during the past three years. Identify which of the following statements is true

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

The following expenses are incurred by Salter Corporation when it is organized on July 1: 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?

Cricket Corporation has a $50,000 NOL in the current year. Cricket does not have pre 2018 NOLs. Cricket expects its taxable income for next year to exceed $40,000. What issues should be considered with respect to the use of the NOL?

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

Identify which of the following statements is false.

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

Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals

Filters

Exam 3: The Corporate Income Tax

Identify which of the following statements is true.

If a corporation's charitable contributions exceed the deduction limitation in a particular year, the excess

Identify which of the following statements is true.

Beta Corporation recently purchased 100% of XYZ Corporation stock. You are their CPA. What tax issues need to be addressed before determining whether or not to file a consolidated tax return?

Baxter Corporation is a personal service corporation. Baxter Corporation has taxable income of $10,000. Baxter Corporation's tax is

What are the various levels of stock ownership by corporate shareholders for the dividends- received deduction (DRD)? What is the DRD% for each level of ownership?

What are some of the advantages and disadvantages of filing a consolidated return?

Newco Corporation has asked you to help determine whether it should use the accrual method or the cash method of accounting. What are the tax issues involved in making this determination?

Identify which of the following statements is true.

Evans Corporation has a $15,000 net capital loss in 2017. The corporation reported the following cap gain netting in income during the past three years. Identify which of the following statements is true

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

The following expenses are incurred by Salter Corporation when it is organized on July 1: 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?

Cricket Corporation has a $50,000 NOL in the current year. Cricket does not have pre 2018 NOLs. Cricket expects its taxable income for next year to exceed $40,000. What issues should be considered with respect to the use of the NOL?

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

Identify which of the following statements is false.

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

Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals

Filters