Exam 11: The Corporate Taxpayer

Torquay Inc.'s 2012 taxable income was $9,782,200, and its tax liability was $3,325,948. Torquay's director of tax estimates that the corporation's 2013 taxable income will be $13,350,000. Use the corporate tax rate schedule to compute Torquay's 2013 estimated tax payment due on April 15, 2013.

Which of the following statements regarding the domestic production activities deduction is false?

Which of the following statements regarding the taxation of corporate profits is true?

A corporation that is unable to meet its original filing deadline may obtain an automatic twelve-month extension of the time to file its federal income tax return.

Silver Bullet Inc. reported the following for its current tax year: Compute Silver Bullet's total income tax liability.

The purpose of Schedule M-1 is to explain the differences between financial statement income and taxable income.

Which of the following is a means to avoid the double taxation burden imposed on the profits of corporations?

The dividends-received deduction is equal to 80% of any dividends-received by a corporate taxpayer.

Thunder, Inc. has invested in the stock of several corporations and has $500,000 operating income before dividends. Calculate Thunder's dividends-received deduction and taxable income:

At least three corporations are required to form an affiliated group.

Alexus Inc.'s alternative minimum taxable income before any AMT exemption is $210,000. Compute the corporation's AMT exemption:

Generally, the corporate income tax is computed on a proportionate rate schedule.

For a corporate taxpayer in the 34% marginal tax bracket, a $20,000 tax credit is equivalent to a $58,824 tax deduction.

Honu, Inc. has book income of $1,200,000. Book income includes $620,000 income tax expense, $10,000 of municipal bond interest income, and $150,000 of meals and entertainment expense. Based only on these items, compute Honu's taxable income.

Which of the following could cause a corporation's alternative minimum taxable income to be lower than regular taxable income?

A corporation that owns more than $10 million of total assets uses which schedule to reconcile book income to taxable income?

Corporations are required to pay their federal tax liability in four quarterly estimated tax installments.

Tropical Corporation was formed in 2007. For 2007 through 2009, its regular and tentative minimum tax were as follows: a. Compute Tropical's tax due for each year b. In 2010, Tropical's regular taxable income is $2,000,000, and it has positive AMT adjustments of $500,000 and AMT preferences of $600,000. Compute Tropical's regular tax, tentative minimum tax, and tax due for 2010.

A corporation's minimum tax credit can reduce the corporation's future regular tax liability if regular tax liability exceeds tentative minimum tax in that year.

Aloha, Inc. had the following results for its first two years of operation: Which of the following statements is true?