Question 1

A Subchapter S corporation must be a domestic corporation.

Accepted Answer

A) True 
 B)False

Question 2

Adjusted Gross Income for a corporation is equal to sales minus cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 3

Schedule L is a reconciliation of net income per books to net income per the tax law.

Accepted Answer

A) True 
 B)False

Question 4

As part of a corporate formation meeting the 80% test,an individual who contributes property and receives,in return,stock plus property,will report a taxable gain equal to the lower of the FMV of the property received or the gain on the transfer.

Accepted Answer

A) True 
 B)False

Question 5

When a corporation is formed,if the sole shareholder contributes property and receives,in return,stock plus property,the individual will report a taxable gain equal to the FMV of the property received.

Accepted Answer

A) True 
 B)False

Question 6

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 7

A corporation has a fiscal-year end of February 28.If the corporation receives an automatic extension to file its return,the return will be due on the 15th day of:

Accepted Answer

A)  September. 
B)  October. 
C)  November. 
D)  December. 
A)  September. 
B)  October. 
C)  November. 
D)  December.

Question 8

The corporate AMT exemption amount is:

Accepted Answer

A)  $40,000. 
B)  $150,000. 
C)  $310,000. 
D)  An amount that varies depending on corporate AMT income. 
A)  $40,000. 
B)  $150,000. 
C)  $310,000. 
D)  An amount that varies depending on corporate AMT income.

Question 9

Basira 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.Basira's taxable gain from this transaction is:

Accepted Answer

A)  $0. 
B)  $300,000. 
C)  $400,000. 
D)  $500,000. 
A)  $0. 
B)  $300,000. 
C)  $400,000. 
D)  $500,000.

Question 10

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:

Accepted Answer

A)  $70,000. 
B)  $75,000. 
C)  $85,000. 
D)  $90,000. 
A)  $70,000. 
B)  $75,000. 
C)  $85,000. 
D)  $90,000.

Question 11

On Schedule M-1,federal income tax must be added back to taxable income.

Accepted Answer

A) True 
 B)False

Question 12

A corporation makes a pro rata distribution of property to its shareholders as part of its normal operations.The FMV of the property is less than its basis.The corporation will record a loss on the distribution.

Accepted Answer

A) True 
 B)False

Question 13

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.

Accepted Answer

Any income or expense item on Schedule K

Question 14

If a corporation would like a Subchapter S election to be valid for the current year,a Form 2553 must be filed:

Accepted Answer

A)  Before the 15th day of the third month of the current fiscal year. 
B)  Before the 15th day of the fourth month of the current fiscal year. 
C)  In the prior fiscal year. 
D)  Before the 15th day of the third month of the current fiscal year or in the prior fiscal year. 
A)  Before the 15th day of the third month of the current fiscal year. 
B)  Before the 15th day of the fourth month of the current fiscal year. 
C)  In the prior fiscal year. 
D)  Before the 15th day of the third month of the current fiscal year or in the prior fiscal year.

Question 15

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

Question 16

A C corporation has a fiscal year-end of April 30.It does not request an extension of time to file its income tax return.It must file its return no later than the 15th day of:

Accepted Answer

A)  September. 
B)  August. 
C)  July. 
D)  June. 
A)  September. 
B)  August. 
C)  July. 
D)  June.

Question 17

Which of the following items is subtracted from book income to arrive at taxable income?

Accepted Answer

A)  The excess of capital losses over capital gains. 
B)  Charitable contributions in excess of the 10% limit. 
C)  50% of travel and entertainment expenses. 
D)  Interest received on tax-exempt bonds. 
A)  The excess of capital losses over capital gains. 
B)  Charitable contributions in excess of the 10% limit. 
C)  50% of travel and entertainment expenses. 
D)  Interest received on tax-exempt bonds.

Question 18

Orange Corporation was formed in 2011.In that year it had a net capital loss of $2,000.In 2012,it had a net capital gain of $5,000.In 2013,the company reported a net capital loss of $9,000.What is the amount of capital loss carryforward to 2014?

Accepted Answer

A)  $0. 
B)  $4,000. 
C)  $6,000. 
D)  $9,000. 
A)  $0. 
B)  $4,000. 
C)  $6,000. 
D)  $9,000.

Question 19

A corporation has taxable income of $400,000.What is its tax liability?

Accepted Answer

A)  $22,100. 
B)  $113,900. 
C)  $136,000. 
D)  $140,000. 
A)  $22,100. 
B)  $113,900. 
C)  $136,000. 
D)  $140,000.

Question 20

Corporate distributions to shareholders are called dividends.

Accepted Answer

A) True 
 B)False

A Subchapter S corporation must be a domestic corporation.

Adjusted Gross Income for a corporation is equal to sales minus cost of goods sold.

Schedule L is a reconciliation of net income per books to net income per the tax law.

As part of a corporate formation meeting the 80% test,an individual who contributes property and receives,in return,stock plus property,will report a taxable gain equal to the lower of the FMV of the property received or the gain on the transfer.

When a corporation is formed,if the sole shareholder contributes property and receives,in return,stock plus property,the individual will report a taxable gain equal to the FMV of the property received.

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

A corporation has a fiscal-year end of February 28.If the corporation receives an automatic extension to file its return,the return will be due on the 15^th day of:

The corporate AMT exemption amount is:

Basira 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.Basira's taxable gain from this transaction is:

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:

On Schedule M-1,federal income tax must be added back to taxable income.

A corporation makes a pro rata distribution of property to its shareholders as part of its normal operations.The FMV of the property is less than its basis.The corporation will record a loss on the distribution.

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.

If a corporation would like a Subchapter S election to be valid for the current year,a Form 2553 must be filed:

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

A C corporation has a fiscal year-end of April 30.It does not request an extension of time to file its income tax return.It must file its return no later than the 15^th day of:

Which of the following items is subtracted from book income to arrive at taxable income?

Orange Corporation was formed in 2011.In that year it had a net capital loss of $2,000.In 2012,it had a net capital gain of $5,000.In 2013,the company reported a net capital loss of $9,000.What is the amount of capital loss carryforward to 2014?

A corporation has taxable income of $400,000.What is its tax liability?

Corporate distributions to shareholders are called dividends.

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

Capital Gains and Other Sales of Property

Rental Property, Royalties, and Income From Flow-Through Entities

Tax Credits

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 Subchapter S corporation must be a domestic corporation.

Adjusted Gross Income for a corporation is equal to sales minus cost of goods sold.

Schedule L is a reconciliation of net income per books to net income per the tax law.

As part of a corporate formation meeting the 80% test,an individual who contributes property and receives,in return,stock plus property,will report a taxable gain equal to the lower of the FMV of the property received or the gain on the transfer.

When a corporation is formed,if the sole shareholder contributes property and receives,in return,stock plus property,the individual will report a taxable gain equal to the FMV of the property received.

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

A corporation has a fiscal-year end of February 28.If the corporation receives an automatic extension to file its return,the return will be due on the 15th day of:

The corporate AMT exemption amount is:

Basira 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.Basira's taxable gain from this transaction is:

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:

On Schedule M-1,federal income tax must be added back to taxable income.

A corporation makes a pro rata distribution of property to its shareholders as part of its normal operations.The FMV of the property is less than its basis.The corporation will record a loss on the distribution.

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.

If a corporation would like a Subchapter S election to be valid for the current year,a Form 2553 must be filed:

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

A C corporation has a fiscal year-end of April 30.It does not request an extension of time to file its income tax return.It must file its return no later than the 15th day of:

Which of the following items is subtracted from book income to arrive at taxable income?

Orange Corporation was formed in 2011.In that year it had a net capital loss of $2,000.In 2012,it had a net capital gain of $5,000.In 2013,the company reported a net capital loss of $9,000.What is the amount of capital loss carryforward to 2014?

A corporation has taxable income of $400,000.What is its tax liability?

Corporate distributions to shareholders are called dividends.

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

Capital Gains and Other Sales of Property

Rental Property, Royalties, and Income From Flow-Through Entities

Tax Credits

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

A corporation has a fiscal-year end of February 28.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 has a fiscal year-end of April 30.It does not request an extension of time to file its income tax return.It must file its return no later than the 15^th day of: