Question 1

In forming a corporation in the current year, organizational expenditures are incurred and paid.These expenditures must be amortized over a period of 180 months.

Accepted Answer

A) True 
 B)False

Question 2

All types of businesses or their owners potentially are entitled to a qualified business income deduction under §
199A.

Accepted Answer

A) True 
 B)False

Question 3

In its current taxable year, Mockingbird Corporation (a calendar year taxpayer) incurs the following income and expenses. $$\begin{array} { l r } 
\text { Gross income from operations } & \$ 1,900,000 \
\text { Expenses from operations } & 2,000,000 \
\text { Dividends from Hummingbird Corporation } & 400,000
\end{array}$$ Mockingbird Corporation owns 10% of the stock of Hummingbird Corporation.The dividends received deduction is:

Accepted Answer

A) $150,000. 
B) $210,000. 
C) $300,000. 
D) $320,000. 
A) $150,000. 
B) $210,000. 
C) $300,000. 
D) $320,000.

Question 4

Gray is a calendar year taxpayer.In early December 2020, Gray's board of directors authorizes a pledge of an $80,000 donation to the Red Cross to help provide food and shelter to victims of natural disasters.The donation is paid as follows: $10,000 in late December 2020, $40,000 in February 2021, and $30,000 in early May 2021.Disregarding percentage limitations, the maximum deduction for 2020 is:

Accepted Answer

A) $80,000 if Gray is an accrual basis individual. 
B) $50,000 if Gray is an accrual basis corporation. 
C) $50,000 if Gray is a cash basis corporation. 
D) $50,000 if Gray is an accrual basis individual. 
A) $80,000 if Gray is an accrual basis individual. 
B) $50,000 if Gray is an accrual basis corporation. 
C) $50,000 if Gray is a cash basis corporation. 
D) $50,000 if Gray is an accrual basis individual.

Question 5

In completing Schedule M-1 (reconciliation of income per books with income per tax return) of Form 1120, to net income per books:

Accepted Answer

A) Add tax-exempt interest. 
B) Add excess of capital loss over capital gain. 
C) Add proceeds of term life insurance received by the corporation due to the death of a key employee. 
D) Subtract Federal income tax. 
A) Add tax-exempt interest. 
B) Add excess of capital loss over capital gain. 
C) Add proceeds of term life insurance received by the corporation due to the death of a key employee. 
D) Subtract Federal income tax.

Question 6

Matching
Using the legend provided, classify each statement accordingly.
-Tax rates are progressive.

Accepted Answer

A) Applies only to the income taxation of individuals 
B) Applies only to the income taxation of C corporations 
C) Applies to both the income taxation of individuals and of C corporations 
D) Applies to neither the income taxation of individuals nor of C corporations 
A) Applies only to the income taxation of individuals 
B) Applies only to the income taxation of C corporations 
C) Applies to both the income taxation of individuals and of C corporations 
D) Applies to neither the income taxation of individuals nor of C corporations

Question 7

When forming a corporation under § 351, recognized gain is the lesser of realized gain or the amount of boot received.

Accepted Answer

A) True 
 B)False

Question 8

Matching
Using the legend provided, classify each statement accordingly.
-A qualified business income deduction is available.

Accepted Answer

A) Applies only to the income taxation of individuals 
B) Applies only to the income taxation of C corporations 
C) Applies to both the income taxation of individuals and of C corporations 
D) Applies to neither the income taxation of individuals nor of C corporations 
A) Applies only to the income taxation of individuals 
B) Applies only to the income taxation of C corporations 
C) Applies to both the income taxation of individuals and of C corporations 
D) Applies to neither the income taxation of individuals nor of C corporations

Question 9

Examples of separately stated items of an S corporation include tax-exempt interest.

Accepted Answer

A) True 
 B)False

Question 10

The AMT tax rate applicable to corporations is the same as that applicable to individuals.

Accepted Answer

A) True 
 B)False

Question 11

A C corporation donates inventory (basis of $9,000, fair market value of $10,000) to charity.Under certain circumstances, it can claim a charitable contribution deduction of $9,500.

Accepted Answer

A) True 
 B)False

Question 12

Like S corporations, partnerships serve as conduits for their owners.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following are likely to be a separately stated item for an S corporation.

Accepted Answer

A) Interest expense on a business loan. 
B) Deduction for accrued salaries. 
C) Cost of goods sold. 
D) The gain on the sale of depreciable property used in a business and held for more than one year. 
A) Interest expense on a business loan. 
B) Deduction for accrued salaries. 
C) Cost of goods sold. 
D) The gain on the sale of depreciable property used in a business and held for more than one year.

In forming a corporation in the current year, organizational expenditures are incurred and paid.These expenditures must be amortized over a period of 180 months.

All types of businesses or their owners potentially are entitled to a qualified business income deduction under § 199A.

In completing Schedule M-1 (reconciliation of income per books with income per tax return) of Form 1120, to net income per books:

Matching Using the legend provided, classify each statement accordingly. -Tax rates are progressive.

When forming a corporation under § 351, recognized gain is the lesser of realized gain or the amount of boot received.

Matching Using the legend provided, classify each statement accordingly. -A qualified business income deduction is available.

Examples of separately stated items of an S corporation include tax-exempt interest.

The AMT tax rate applicable to corporations is the same as that applicable to individuals.

A C corporation donates inventory (basis of $9,000, fair market value of $10,000) to charity.Under certain circumstances, it can claim a charitable contribution deduction of $9,500.

Like S corporations, partnerships serve as conduits for their owners.

Which of the following are likely to be a separately stated item for an S corporation.

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

Filters

Exam 20: Corporations and Partnerships

In forming a corporation in the current year, organizational expenditures are incurred and paid.These expenditures must be amortized over a period of 180 months.

All types of businesses or their owners potentially are entitled to a qualified business income deduction under § 199A.

In completing Schedule M-1 (reconciliation of income per books with income per tax return) of Form 1120, to net income per books:

Matching Using the legend provided, classify each statement accordingly. -Tax rates are progressive.

When forming a corporation under § 351, recognized gain is the lesser of realized gain or the amount of boot received.

Matching Using the legend provided, classify each statement accordingly. -A qualified business income deduction is available.

Examples of separately stated items of an S corporation include tax-exempt interest.

The AMT tax rate applicable to corporations is the same as that applicable to individuals.

A C corporation donates inventory (basis of $9,000, fair market value of $10,000) to charity.Under certain circumstances, it can claim a charitable contribution deduction of $9,500.

Like S corporations, partnerships serve as conduits for their owners.

Which of the following are likely to be a separately stated item for an S corporation.

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

Filters