Skinner Corporation, a calendar year C corporation, had the following transactions during 2020: \[\begin{array} { l r } \text { Income from operations } & \$ 800,000 \\ \text { Expenses from operations } & 900,000 \\ \text { Dividends from Siskin Corporation (20\% ownership) } & 200,000 \end{array}\] Skinner's taxable income (or NOL) for 2020 is:

A) $100,000 taxable income. B) $30,000 NOL. C) $60,000 NOL. D) $100,000 NOL. A) $100,000 taxable income. B) $30,000 NOL. C) $60,000 NOL. D) $100,000 NOL.

Jean is a shareholder in Parrot Corporation, a calendar year S corporation.During the year, Jean's share of the pass- through from Parrot is: \[\begin{array} { l r } \text { - Dividend distribution by Parrot } & \$ 30,000 \\ \text { - Long-term capital gain } & 5,000 \\ \text { - Operating loss } & 20,000 \\ \text { - Tax-exempt interest income } & 10,000 \end{array}\] If Jean's basis in the Parrot stock was $100,000 at the beginning of the year, her basis at the end of the year is:

A) $45,000. B) $55,000. C) $65,000. D) $95,000. A) $45,000. B) $55,000. C) $65,000. D) $95,000.

Snipe Corporation, a calendar year taxpayer, has total E & P of $800,000.During the current year, Snipe makes property distributions to Tracy (the sole shareholder) as follows. \[\begin{array} { l r r } & \text { Adjusted Basis } & \text { Fair Market Value } \\ \text { Stock investment } & \$ 100,000 & \$ 90,000 \\ \text { Land } & 270,000 & 300,000 \end{array}\] As a result of these distributions:

A) Snipe must recognize a gain of $30,000 and no recognized loss. B) Snipe must recognize a gain of $30,000 and recognize a loss of $10,000. C) Snipe recognizes neither gain nor loss. D) Tracy will have a basis of $100,000 in the stock investment and $270,000 in the land. A) Snipe must recognize a gain of $30,000 and no recognized loss. B) Snipe must recognize a gain of $30,000 and recognize a loss of $10,000. C) Snipe recognizes neither gain nor loss. D) Tracy will have a basis of $100,000 in the stock investment and $270,000 in the land.

Exam 20: Corporations and Partnerships

After years of successful business, Mega Corporation recently stopped operating.The shareholders are going to pivot the business strategy into a new direction but are awaiting a new capital injection.As a result, the corporation sat idle for the entire tax year and generated no taxable income.Mega does not need to file a Federal income tax return.

(True/False)

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Question 41

Which, if any, of the following costs cannot be expensed or amortized as organizational expenses?

(Multiple Choice)

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Question 42

Using the legend provided, classify each statement accordingly. -A deduction for organizational expenditures is allowed.

(Multiple Choice)

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Question 43

Property distributions to shareholders can result in the distributing corporation recognizing gains and losses.

(True/False)

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Question 44

A city donates land to a corporation in return for the corporation's construction of an assembly plant on the site.The fair market value of the land is taxed to the corporation as income.

(True/False)

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Question 45

Organizational expenditures are deducted by a C corporation in the year the business begins.

(True/False)

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Question 46

Using the legend provided, classify each statement accordingly. -A shareholder cannot have a negative basis in his or her stock investment.

(Multiple Choice)

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Question 47

A distribution to a shareholder could result in dividend income even if the corporation had a deficit in current E & P.

(True/False)

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Question 48

Both individuals and corporations can carry over excess charitable contributions indefinitely.

(True/False)

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(78)

Question 49

Skinner Corporation, a calendar year C corporation, had the following transactions during 2020: Income from operations \ 800,000 Expenses from operations 900,000 Dividends from Siskin Corporation (20\% ownership) 200,000 Skinner's taxable income (or NOL) for 2020 is:

(Multiple Choice)

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Question 50

If the basis of a partnership interest is exhausted, a partner can use loans made to the partnership to absorb excess losses.

(True/False)

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Question 51

An S corporation makes a $20,000 cash distribution to a shareholder whose basis in the stock is $19,000.The distribution will result in a $1,000 negative basis in the stock.

(True/False)

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Question 52

The amount of the dividends received deduction is affected by the percentage of ownership held by the recipient corporation in the paying corporation.

(True/False)

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Question 53

Jean is a shareholder in Parrot Corporation, a calendar year S corporation.During the year, Jean's share of the pass- through from Parrot is: - Dividend distribution by Parrot \ 30,000 - Long-term capital gain 5,000 - Operating loss 20,000 - Tax-exempt interest income 10,000 If Jean's basis in the Parrot stock was $100,000 at the beginning of the year, her basis at the end of the year is:

(Multiple Choice)

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Question 54

Mega Corporation has been operating successfully for a number of years and needs additional capital to meets its expansion strategy.Warren Tuffett, a wealthy businessman, contributes $100 million of cash in exchange for shares in Mega.Mega recognizes gross income for the contribution.

(True/False)

4.9/5

(94)

Question 55

Snipe Corporation, a calendar year taxpayer, has total E & P of $800,000.During the current year, Snipe makes property distributions to Tracy (the sole shareholder) as follows. Adjusted Basis Fair Market Value Stock investment \ 100,000 \ 90,000 Land 270,000 300,000 As a result of these distributions:

(Multiple Choice)

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Question 56

Which, if any, of the following transactions incurred by an S corporation is not a separately stated item?

(Multiple Choice)

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Question 57

Federal corporate income tax rates are progressive, but the lower brackets are phased out at higher taxable income levels.

(True/False)

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Question 58

Matching Using the legend provided, classify each statement accordingly. -Estimated tax payments may have to be made.

(Multiple Choice)

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Question 59

The choice of entity decision is typically made many years after the business is formed.

(True/False)

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Question 60

Showing 41 - 60 of 153

Which, if any, of the following costs cannot be expensed or amortized as organizational expenses?

Using the legend provided, classify each statement accordingly. -A deduction for organizational expenditures is allowed.

Property distributions to shareholders can result in the distributing corporation recognizing gains and losses.

A city donates land to a corporation in return for the corporation's construction of an assembly plant on the site.The fair market value of the land is taxed to the corporation as income.

Organizational expenditures are deducted by a C corporation in the year the business begins.

Using the legend provided, classify each statement accordingly. -A shareholder cannot have a negative basis in his or her stock investment.

A distribution to a shareholder could result in dividend income even if the corporation had a deficit in current E & P.

Both individuals and corporations can carry over excess charitable contributions indefinitely.

Skinner Corporation, a calendar year C corporation, had the following transactions during 2020: Income from operations \ 800,000 Expenses from operations 900,000 Dividends from Siskin Corporation (20\% ownership) 200,000 Skinner's taxable income (or NOL) for 2020 is:

If the basis of a partnership interest is exhausted, a partner can use loans made to the partnership to absorb excess losses.

An S corporation makes a $20,000 cash distribution to a shareholder whose basis in the stock is $19,000.The distribution will result in a $1,000 negative basis in the stock.

The amount of the dividends received deduction is affected by the percentage of ownership held by the recipient corporation in the paying corporation.

Mega Corporation has been operating successfully for a number of years and needs additional capital to meets its expansion strategy.Warren Tuffett, a wealthy businessman, contributes $100 million of cash in exchange for shares in Mega.Mega recognizes gross income for the contribution.

Which, if any, of the following transactions incurred by an S corporation is not a separately stated item?

Federal corporate income tax rates are progressive, but the lower brackets are phased out at higher taxable income levels.

Matching Using the legend provided, classify each statement accordingly. -Estimated tax payments may have to be made.

The choice of entity decision is typically made many years after the business is formed.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

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