Question 1

A capital loss carryforward will create a reconciling item on Schedule M-1,but a capital loss carryback will not.

Accepted Answer

A) True 
 B)False

Question 2

Keisha owns 100% of DEF Company and has a basis of $10,000 in its stock.DEF has earnings and profits of $9,000 and distributes a cash dividend to Keisha of $12,000.Keisha has a:

Accepted Answer

A) Capital gain of $2,000. 
B) Dividend of $12,000. 
C) Nontaxable distribution of $1,000. 
D) Nontaxable distribution of $3,000. 
A) Capital gain of $2,000. 
B) Dividend of $12,000. 
C) Nontaxable distribution of $1,000. 
D) Nontaxable distribution of $3,000.

Question 3

What is the AMT exemption amount for a corporation with AMT income of $200,000?

Accepted Answer

A) $0. 
B) $12,500. 
C) $27,500. 
D) $40,000. 
A) $0. 
B) $12,500. 
C) $27,500. 
D) $40,000.

Question 4

Shauntae receives a distribution from a corporation in complete liquidation of his ownership interest.Shauntae could report a capital gain,but not a capital loss,from the distribution.

Accepted Answer

A) True 
 B)False

Question 5

Sunrise Corporation owns 30% of Sunset Corporation.Both are domestic corporations.Sunset pays a $10,000 dividend to Sunrise.What amount of dividend income will be included in the taxable income of Sunrise Corporation?

Accepted Answer

A) $2,000. 
B) $3,000. 
C) $8,000. 
D) $10,000. 
A) $2,000. 
B) $3,000. 
C) $8,000. 
D) $10,000.

Question 6

Sunshine Company has book income of $250,000.It also has tax depreciation in excess of book depreciation of $30,000 and $10,000 of interest on tax-exempt bonds.Without regard to tax expense,what is Sunshine's taxable income?

Accepted Answer

A) $210,000. 
B) $230,000. 
C) $270,000. 
D) $290,000. 
A) $210,000. 
B) $230,000. 
C) $270,000. 
D) $290,000.

Question 7

Which of the following items decrease basis for a stockholder of a Subchapter S corporation?

Accepted Answer

A) Capital contributions. 
B) Charitable contributions. 
C) Loans from the shareholder to the corporation. 
D) Net income. 
A) Capital contributions. 
B) Charitable contributions. 
C) Loans from the shareholder to the corporation. 
D) Net income.

Question 8

To legally operate as a corporation in most states,the incorporators must simply file a corporate federal income tax return.

Accepted Answer

A) True 
 B)False

Question 9

Pricilla formed a corporation and owns all of the stock.She contributed property with a FMV of $60,000 and a basis of $55,000 and she received $10,000 cash from the corporation.Pricilla's taxable gain is:

Accepted Answer

A) $0. 
B) $5,000. 
C) $10,000. 
D) $60,000. 
A) $0. 
B) $5,000. 
C) $10,000. 
D) $60,000.

Question 10

Arturo 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 $600,000 and debt of $400,000.The basis of the land,in the hands of the corporation is:

Accepted Answer

A) $300,000. 
B) $400,000. 
C) $600,000. 
D) $900,000. 
A) $300,000. 
B) $400,000. 
C) $600,000. 
D) $900,000.

Question 11

PQR Corporation has taxable income before DRD of $60,000 that includes a dividend of $10,000 from a large publicly-traded domestic corporation.What is the tax liability of PQR Corporation?

Accepted Answer

A) $7,500. 
B) $8,000. 
C) $8,250. 
D) $10,000. 
A) $7,500. 
B) $8,000. 
C) $8,250. 
D) $10,000.

Question 12

Windy Company has taxable income before DRD of $200,000.Included in that amount is a $10,000 dividend from a domestic corporation owned 10% by Windy and a $30,000 dividend from a domestic corporation owned 60% by Windy.What is the taxable income of Windy Company?

Accepted Answer

A) $181,000. 
B) $179,000. 
C) $169,000. 
D) $168,000. 
A) $181,000. 
B) $179,000. 
C) $169,000. 
D) $168,000.

Question 13

When a corporation is formed,if the transferors own 80% or more of the corporation immediately after the exchange,then the transaction is,generally,tax-free.

Accepted Answer

A) True 
 B)False

Question 14

The corporate alternative minimum tax exemption begins to phase out for AMT income of ________,and is completely phased out at AMT income of ________ or more.

Accepted Answer

A) $40,000;$150,000 
B) $40,000;$310,000 
C) $150,000;$300,000 
D) $150,000;$310,000 
A) $40,000;$150,000 
B) $40,000;$310,000 
C) $150,000;$300,000 
D) $150,000;$310,000

Question 15

When are estimated income tax payments due for a corporation with a fiscal year-end of November? What if the fiscal year-end is June?

Accepted Answer

Estimated tax payments are due the 15^th da

Question 16

The basis of a shareholder in his or her Subchapter S stock is increased by his or her share of corporate charitable contributions.

Accepted Answer

A) True 
 B)False

Question 17

If a corporation has a net capital loss,it can carry that loss back three years and then forward six.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) $300,000. 
B) $400,000. 
C) $500,000. 
D) $900,000. 
A) $300,000. 
B) $400,000. 
C) $500,000. 
D) $900,000.

Question 19

Schedule L is prepared using the accounting method the corporation uses to keep its financial accounting records.

Accepted Answer

A) True 
 B)False

Question 20

When a corporation distributes property to shareholders that has a FMV in excess of basis,the corporation will recognize a gain.

Accepted Answer

A) True 
 B)False

A capital loss carryforward will create a reconciling item on Schedule M-1,but a capital loss carryback will not.

Keisha owns 100% of DEF Company and has a basis of $10,000 in its stock.DEF has earnings and profits of $9,000 and distributes a cash dividend to Keisha of $12,000.Keisha has a:

What is the AMT exemption amount for a corporation with AMT income of $200,000?

Shauntae receives a distribution from a corporation in complete liquidation of his ownership interest.Shauntae could report a capital gain,but not a capital loss,from the distribution.

Sunrise Corporation owns 30% of Sunset Corporation.Both are domestic corporations.Sunset pays a $10,000 dividend to Sunrise.What amount of dividend income will be included in the taxable income of Sunrise Corporation?

Sunshine Company has book income of $250,000.It also has tax depreciation in excess of book depreciation of $30,000 and $10,000 of interest on tax-exempt bonds.Without regard to tax expense,what is Sunshine's taxable income?

Which of the following items decrease basis for a stockholder of a Subchapter S corporation?

To legally operate as a corporation in most states,the incorporators must simply file a corporate federal income tax return.

Pricilla formed a corporation and owns all of the stock.She contributed property with a FMV of $60,000 and a basis of $55,000 and she received $10,000 cash from the corporation.Pricilla's taxable gain is:

Arturo 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 $600,000 and debt of $400,000.The basis of the land,in the hands of the corporation is:

PQR Corporation has taxable income before DRD of $60,000 that includes a dividend of $10,000 from a large publicly-traded domestic corporation.What is the tax liability of PQR Corporation?

Windy Company has taxable income before DRD of $200,000.Included in that amount is a $10,000 dividend from a domestic corporation owned 10% by Windy and a $30,000 dividend from a domestic corporation owned 60% by Windy.What is the taxable income of Windy Company?

When a corporation is formed,if the transferors own 80% or more of the corporation immediately after the exchange,then the transaction is,generally,tax-free.

The corporate alternative minimum tax exemption begins to phase out for AMT income of ,and is completely phased out at AMT income of or more.

When are estimated income tax payments due for a corporation with a fiscal year-end of November? What if the fiscal year-end is June?

The basis of a shareholder in his or her Subchapter S stock is increased by his or her share of corporate charitable contributions.

If a corporation has a net capital loss,it can carry that loss back three years and then forward six.

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

Schedule L is prepared using the accounting method the corporation uses to keep its financial accounting records.

When a corporation distributes property to shareholders that has a FMV in excess of basis,the corporation will recognize a gain.

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Filters

Exam 15: Corporate Taxation

A capital loss carryforward will create a reconciling item on Schedule M-1,but a capital loss carryback will not.

Keisha owns 100% of DEF Company and has a basis of $10,000 in its stock.DEF has earnings and profits of $9,000 and distributes a cash dividend to Keisha of $12,000.Keisha has a:

What is the AMT exemption amount for a corporation with AMT income of $200,000?

Shauntae receives a distribution from a corporation in complete liquidation of his ownership interest.Shauntae could report a capital gain,but not a capital loss,from the distribution.

Sunrise Corporation owns 30% of Sunset Corporation.Both are domestic corporations.Sunset pays a $10,000 dividend to Sunrise.What amount of dividend income will be included in the taxable income of Sunrise Corporation?

Sunshine Company has book income of $250,000.It also has tax depreciation in excess of book depreciation of $30,000 and $10,000 of interest on tax-exempt bonds.Without regard to tax expense,what is Sunshine's taxable income?

Which of the following items decrease basis for a stockholder of a Subchapter S corporation?

To legally operate as a corporation in most states,the incorporators must simply file a corporate federal income tax return.

Pricilla formed a corporation and owns all of the stock.She contributed property with a FMV of $60,000 and a basis of $55,000 and she received $10,000 cash from the corporation.Pricilla's taxable gain is:

Arturo 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 $600,000 and debt of $400,000.The basis of the land,in the hands of the corporation is:

PQR Corporation has taxable income before DRD of $60,000 that includes a dividend of $10,000 from a large publicly-traded domestic corporation.What is the tax liability of PQR Corporation?

Windy Company has taxable income before DRD of $200,000.Included in that amount is a $10,000 dividend from a domestic corporation owned 10% by Windy and a $30,000 dividend from a domestic corporation owned 60% by Windy.What is the taxable income of Windy Company?

When a corporation is formed,if the transferors own 80% or more of the corporation immediately after the exchange,then the transaction is,generally,tax-free.

The corporate alternative minimum tax exemption begins to phase out for AMT income of ________,and is completely phased out at AMT income of ________ or more.

When are estimated income tax payments due for a corporation with a fiscal year-end of November? What if the fiscal year-end is June?

The basis of a shareholder in his or her Subchapter S stock is increased by his or her share of corporate charitable contributions.

If a corporation has a net capital loss,it can carry that loss back three years and then forward six.

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

Schedule L is prepared using the accounting method the corporation uses to keep its financial accounting records.

When a corporation distributes property to shareholders that has a FMV in excess of basis,the corporation will recognize a gain.

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Filters

The corporate alternative minimum tax exemption begins to phase out for AMT income of ,and is completely phased out at AMT income of or more.