Question 1

Federal income tax expense reported on a corporation's books generates a temporary book-tax difference for Schedule M-3 purposes.

Accepted Answer

A) True 
 B)False

Question 2

Large corporations (corporations with more than $1,000,000 in taxable income in any of the three years prior to the current year)can use their prior tax year liability to determine all required estimated quarterly payments for the current year.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements regarding book-tax differences is true?

Accepted Answer

A)  Corporations are not required to report book-tax differences on their income tax returns. 
B)  Corporations will eventually recognize the same amount of income for book and tax purposes for income-related temporary book-tax differences. 
C)  Income excludable for tax purposes usually creates a temporary book-tax difference. 
D)  None of the choices are true. 
A)  Corporations are not required to report book-tax differences on their income tax returns. 
B)  Corporations will eventually recognize the same amount of income for book and tax purposes for income-related temporary book-tax differences. 
C)  Income excludable for tax purposes usually creates a temporary book-tax difference. 
D)  None of the choices are true.

Question 4

In 2017,Webtel Corporation donated $50,000 to a qualifying charity.For the year,it reported taxable income of $310,000,which included the following: the $50,000 charitable contribution (before limitation),a $100,000 dividends received deduction,and a $20,000 net operating loss carryover.What is Webtel Corp.'s charitable contribution deduction?

Accepted Answer

$46,000,co

Question 5

For 2017,accrual-method corporations cannot deduct charitable contributions until they actually make payment to the charity.

Accepted Answer

A) True 
 B)False

Question 6

Large corporations (gross receipts of $5 million or more)are allowed to use the cash method of accounting for at least the first two years of their existence.

Accepted Answer

A) True 
 B)False

Question 7

Calendar-year corporations that request an extension for filing their 2017 tax returns will have a tax return due date of October 15.

Accepted Answer

A) True 
 B)False

Question 8

A corporation generally will report a favorable,temporary book-tax difference when it deducts a charitable contribution carryover.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is deductible in calculating the charitable contribution limit modified taxable income?

Accepted Answer

A)  Net capital loss carrybacks. 
B)  NOL carrybacks. 
C)  NOL carryovers. 
D)  Charitable contributions. 
A)  Net capital loss carrybacks. 
B)  NOL carrybacks. 
C)  NOL carryovers. 
D)  Charitable contributions.

Question 10

Remsco has taxable income of $60,000 and a charitable contribution limit modified taxable income of $72,000.Its charitable contributions for the year were $7,500.What is Remsco's current-year charitable contribution deduction and contribution carryover?

Accepted Answer

A)  $6,000 current-year deduction; $1,500 carryover. 
B)  $7,500 current-year deduction; $0 carryover. 
C)  $1,200 current-year deduction; $6,300 carryover. 
D)  $7,200 current-year deduction; $300 carryover. 
A)  $6,000 current-year deduction; $1,500 carryover. 
B)  $7,500 current-year deduction; $0 carryover. 
C)  $1,200 current-year deduction; $6,300 carryover. 
D)  $7,200 current-year deduction; $300 carryover.

Question 11

Corporation A receives a dividend from Corporation B.Corporation A includes the dividend in its gross income for tax and financial accounting purposes (no book-tax difference).If A has accounted for the dividend correctly (following the general rule),how much of B stock does A own?

Accepted Answer

A)  A owns less than 20 percent of the stock of B. 
B)  A owns at least 20 but not more than 50 percent of the stock of B. 
C)  A owns more than 50 percent of the stock of B. 
D)  Cannot be determined. 
A)  A owns less than 20 percent of the stock of B. 
B)  A owns at least 20 but not more than 50 percent of the stock of B. 
C)  A owns more than 50 percent of the stock of B. 
D)  Cannot be determined.

Question 12

Which of the following statements regarding excess charitable contributions (contributions in excess of the modified taxable income limitation)by corporations is true?

Accepted Answer

A)  Corporations may not carry over or carry back excess charitable contributions. 
B)  Corporations can carry excess charitable contributions over to a future year or back to a prior year. 
C)  Corporations can carry excess charitable contributions over to a future year but not back to a prior year. 
D)  Corporations can carry excess charitable contributions back to a prior year but not over to a future year. 
A)  Corporations may not carry over or carry back excess charitable contributions. 
B)  Corporations can carry excess charitable contributions over to a future year or back to a prior year. 
C)  Corporations can carry excess charitable contributions over to a future year but not back to a prior year. 
D)  Corporations can carry excess charitable contributions back to a prior year but not over to a future year.

Question 13

Canny Foods Co.is considering three ways it could contribute to a local,qualified charity.First,it could give $5,000 in cash.Second,it could give stock it initially purchased two years ago for $4,000 but is now worth $6,000.Third,it could give items of inventory with a fair market value of $7,000 but with an adjusted basis of $3,000.Which of the following correctly describes the relation among possible charitable contributions in terms of amount deductible for tax purposes?

Accepted Answer

A)  Cash > Stock > Inventory. 
B)  Stock > Cash > Inventory. 
C)  Inventory > Stock > Cash. 
D)  Inventory > Cash > Stock. 
A)  Cash > Stock > Inventory. 
B)  Stock > Cash > Inventory. 
C)  Inventory > Stock > Cash. 
D)  Inventory > Cash > Stock.

Question 14

Corporations calculate adjusted gross income (AGI)in the same way as individuals.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following does NOT create a permanent book-tax difference?

Accepted Answer

A)  Organizational and start-up expenses. 
B)  Key employee death benefit income. 
C)  Fines and penalties expenses. 
D)  Municipal bond interest income. 
A)  Organizational and start-up expenses. 
B)  Key employee death benefit income. 
C)  Fines and penalties expenses. 
D)  Municipal bond interest income.

Question 16

During 2017,Hughes Corporation sold a portfolio of stock it had held for five years at a loss of $200,000.It also sold some investment land and recognized a capital gain of $180,000.In 2015,Hughes reported a net capital gain of $12,000 and in 2016 it recognized a net capital gain of $6,000.What is the amount of its net capital loss carryover to 2018?

Accepted Answer

$2,000,com

Question 17

Income that is included in book income,but excluded from taxable income,results in a favorable,permanent book-tax difference.

Accepted Answer

A) True 
 B)False

Question 18

Jazz Corporation owns 10% of the Williams Corp.stock.Williams distributed a $10,000 dividend to Jazz Corporation.Jazz Corp.'s taxable income (loss)before the dividend was ($2,000).What is the amount of Jazz's dividends received deduction on the dividend it received from Williams Corp.?

Accepted Answer

A)  $0. 
B)  $5,600. 
C)  $7,000. 
D)  $8,000. 
E)  None of the choices are correct. 
A)  $0. 
B)  $5,600. 
C)  $7,000. 
D)  $8,000. 
E)  None of the choices are correct.

Question 19

Net operating losses generally create permanent book-tax differences.

Accepted Answer

A) True 
 B)False

Question 20

The dividends received deduction is subject to a limitation based on modified taxable income.

Accepted Answer

A) True 
 B)False

Federal income tax expense reported on a corporation's books generates a temporary book-tax difference for Schedule M-3 purposes.

Large corporations (corporations with more than $1,000,000 in taxable income in any of the three years prior to the current year)can use their prior tax year liability to determine all required estimated quarterly payments for the current year.

Which of the following statements regarding book-tax differences is true?

For 2017,accrual-method corporations cannot deduct charitable contributions until they actually make payment to the charity.

Large corporations (gross receipts of $5 million or more)are allowed to use the cash method of accounting for at least the first two years of their existence.

Calendar-year corporations that request an extension for filing their 2017 tax returns will have a tax return due date of October 15.

A corporation generally will report a favorable,temporary book-tax difference when it deducts a charitable contribution carryover.

Which of the following is deductible in calculating the charitable contribution limit modified taxable income?

Remsco has taxable income of $60,000 and a charitable contribution limit modified taxable income of $72,000.Its charitable contributions for the year were $7,500.What is Remsco's current-year charitable contribution deduction and contribution carryover?

Corporation A receives a dividend from Corporation B.Corporation A includes the dividend in its gross income for tax and financial accounting purposes (no book-tax difference).If A has accounted for the dividend correctly (following the general rule),how much of B stock does A own?

Which of the following statements regarding excess charitable contributions (contributions in excess of the modified taxable income limitation)by corporations is true?

Corporations calculate adjusted gross income (AGI)in the same way as individuals.

Which of the following does NOT create a permanent book-tax difference?

Income that is included in book income,but excluded from taxable income,results in a favorable,permanent book-tax difference.

Jazz Corporation owns 10% of the Williams Corp.stock.Williams distributed a $10,000 dividend to Jazz Corporation.Jazz Corp.'s taxable income (loss)before the dividend was ($2,000).What is the amount of Jazz's dividends received deduction on the dividend it received from Williams Corp.?

Net operating losses generally create permanent book-tax differences.

The dividends received deduction is subject to a limitation based on modified taxable income.

Business Income,Deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Neorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 5: Corporate Operations

Federal income tax expense reported on a corporation's books generates a temporary book-tax difference for Schedule M-3 purposes.

Large corporations (corporations with more than $1,000,000 in taxable income in any of the three years prior to the current year)can use their prior tax year liability to determine all required estimated quarterly payments for the current year.

Which of the following statements regarding book-tax differences is true?

For 2017,accrual-method corporations cannot deduct charitable contributions until they actually make payment to the charity.

Large corporations (gross receipts of $5 million or more)are allowed to use the cash method of accounting for at least the first two years of their existence.

Calendar-year corporations that request an extension for filing their 2017 tax returns will have a tax return due date of October 15.

A corporation generally will report a favorable,temporary book-tax difference when it deducts a charitable contribution carryover.

Which of the following is deductible in calculating the charitable contribution limit modified taxable income?

Remsco has taxable income of $60,000 and a charitable contribution limit modified taxable income of $72,000.Its charitable contributions for the year were $7,500.What is Remsco's current-year charitable contribution deduction and contribution carryover?

Corporation A receives a dividend from Corporation B.Corporation A includes the dividend in its gross income for tax and financial accounting purposes (no book-tax difference).If A has accounted for the dividend correctly (following the general rule),how much of B stock does A own?

Which of the following statements regarding excess charitable contributions (contributions in excess of the modified taxable income limitation)by corporations is true?

Corporations calculate adjusted gross income (AGI)in the same way as individuals.

Which of the following does NOT create a permanent book-tax difference?

Income that is included in book income,but excluded from taxable income,results in a favorable,permanent book-tax difference.

Jazz Corporation owns 10% of the Williams Corp.stock.Williams distributed a $10,000 dividend to Jazz Corporation.Jazz Corp.'s taxable income (loss)before the dividend was ($2,000).What is the amount of Jazz's dividends received deduction on the dividend it received from Williams Corp.?

Net operating losses generally create permanent book-tax differences.

The dividends received deduction is subject to a limitation based on modified taxable income.

Business Income,Deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Neorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters