Exam 15: Corporate Taxation

Teal Corporation has taxable income of $320,000.The corporation had total meal travel and entertainment expenses of $50,000,charitable contributions of $10,000,and tax depreciation in excess of book depreciation of $45,000.Without regard to tax expense for financial statement purposes,what is the book net income of Teal?

MMM Company has taxable income of $300,000.The company received a dividend of $50,000 from a domestic corporation in which it holds a 60% ownership interest.It also has tax depreciation that is $20,000 greater than financial statement depreciation.These items were properly accounted for in determining taxable income.Without regard to tax expense,what is financial statement income of MMM Company?

Gold Corporation sells baseball bats and reported net income of $35,000 before charitable contributions.It contributed 100 bats to a local high school.Each bat has a FMV of $40 and a basis of $30.Determine Gold's taxable income and charitable contribution carryforward.

JJJ Company has earnings and profits of $30,000.The corporation distributes property with a basis of $40,000 and a FMV of $35,000 to Jill,its sole shareholder.Her basis in the stock is $30,000.Which of the following statements is correct?

Adam owns 100% of Banana Company and has a basis of $60,000 in its stock.The company has earnings and profits of $54,000 and distributes a cash dividend to Adam of $72,000.Adam has a:

Corporations with total receipts and total assets less than $250,000 are not required to complete Schedule L or Schedule M-1.

Determine the basis of stock in the hands of the shareholder,the basis to the corporation of the contributed property,and the gain,if any,to the shareholder in each of the following independent cases.In all cases,assume that the 80% test is met. a.Pierre contributes a vehicle with a FMV of $6,000 and basis of $8,000. b.Marcus contributes land with a FMV of $500,000,basis of $300,000,and debt of $250,000. c.Same as b.except Marcus also receives cash of $25,000. d.Patricia contributes an apartment building with a FMV of $200,000,basis of $50,000,and debt of $125,000.

Schedule M-1 reconciles from net income per books to net income per the tax law.

Willow Corporation has book income of $300,000,which includes tax expense of $70,000.It reported a capital loss of $10,000,and tax-exempt municipal bond interest of $30,000.Willow's taxable income is:

Corporate distributions in excess of earnings and profits are a capital gain to a stockholder.

Which of the following statements is incorrect?

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

Black Company is a Subchapter S corporation.It reported book income of $100,000.Included in that amount is dividend income of $5,000,a net capital loss of $4,000,and a charitable contribution of $20,000.Determine the ordinary income/loss of the corporation and the nature and amount of any separately stated items.

Ramona is a 50% shareholder in a Subchapter S corporation.At the beginning of the year,her basis in the stock was $100,000.The corporation reported total ordinary income of $60,000 and total dividend income of $20,000.The corporation also borrowed an additional $20,000 from a local bank.What is the basis of Ramona's stock at the end of the year?

A corporation can elect to be taxed as a Subchapter S corporation if it meets certain requirements including that it has 100 or fewer shareholders,all of whom are individuals,estates,and certain trusts.

A C corporation has a fiscal year-end of September 30.If the corporation receives an automatic extension to file its return,the return will be due on the 15^th day of:

A C corporation can become a Subchapter S corporation by filing a statement with its corporate income tax return.

Parent-subsidiary corporations must file a consolidated tax return.

Kyung formed a corporation and owns all of the stock.He contributed property with a FMV of $90,000 and a basis of $85,000,and he received $15,000 cash from the corporation.Kyung's basis in his stock is:

If a shareholder receives cash from a corporation in complete liquidation of his or her ownership interest and the cash received is less than the shareholder's basis in the stock,the shareholder will report a loss.