Exam 15: Corporate Taxation

Barrie owns 100% of a Subchapter S corporation and her basis in the stock is $200,000.In the current year,the corporation reports an ordinary loss of $250,000 and interest income of $20,000.How much of the loss can Barrie claim in the current year?

A corporation can deduct a charitable contribution of up to 50% of its adjusted gross income.

A corporation subject to AMT has AMT income of $190,000.What is the amount of alternative minimum tax?

Which of the following statements is incorrect?

Felix transfers land with a FMV of $900,000 to a newly formed corporation in exchange for all the stock.The land has a basis of $300,000 and debt of $500,000.The basis of the land,in the hands of the corporation is:

TTT Corporation has a fiscal year-end that ends on March 30.It is required to make quarterly estimated payments.The first estimated payment will be due on the 15^th of:

The maximum marginal corporate tax rate is 35%.

Determine the amount of taxable dividend,return of capital,and capital gain in each of the following independent cases. a.Corporate earnings and profits of $100,000;stockholder basis in stock of $60,000;distribution of $20,000. b.Corporate earnings and profits of $25,000;stockholder basis in stock of $40,000;distribution of $70,000. c.Corporate earnings and profits of $300,000;stockholder basis in stock of $450,000;distribution of $350,000.

Certain items of income or expense are not included in income of a Subchapter S corporation but,instead,are separately stated on Schedule K-1.List some items that are separately stated.

Heather and Howie form HH Company.In exchange for 50% of the stock,Heather contributes cash of $7,000.For the remaining 50%,Howie contributes a truck with a FMV of $7,000 (basis of $10,000).Which of the following statements is correct?

A parent-subsidiary group is one in which a common parent corporation owns,directly or indirectly,at least 80% of one or more other corporations.

Andre formed a corporation and owns all the stock.He contributed property with a FMV of $10,000 and a basis of $7,000 and he received $1,000 cash from the corporation.Andre's taxable gain is:

Zeus owns 100% of Grecian Image Corporation and his basis in the stock is $105,000.He receives cash of $20,000 and property with FMV of $100,000 and basis of $140,000 in complete liquidation of his ownership interest.What amount of gain or loss should Zeus recognize as a result of this transaction?

Corporate distributions to shareholders from earnings and profits are called dividends.

Caesar owns 100% of Roman Company and his basis in its stock is $35,000.He receives cash of $10,000 and property with FMV of $30,000 and basis of $50,000 in complete liquidation of his ownership interest.As a result of this transaction,which of the following statements is incorrect?

A corporation subject to AMT has AMT income of $270,000.What is the amount of alternative minimum tax?

A C corporation has a fiscal year-end of May.If the corporation receives an automatic extension to file its return,the return will be due on the 15^th of:

The corporate alternative minimum tax exemption amount is $150,000.

Large C corporations must use the accrual basis of accounting.

A corporation can choose to voluntarily revoke a valid Subchapter S election.How do the shareholders accomplish a voluntary revocation and when will the revocation be effective?