Exam 11: The Corporate Income Tax

Which of the following is true with respect to capital gains and losses of a corporation?

For 2018, what is the maximum tax rate for personal service corporations?

A regular corporation with excess charitable contributions may carry the excess forward to the five succeeding tax years.​

XYZ Corporation has a December 31 year-end.​ a.When is XYZ Corporation's tax return due? b.When does XYZ Corporation need to make its estimated tax payments? c.Assuming that XYZ Corporation owes $5,000 on the original tax return due date and it files for an extension and is granted an automatic extension to file tax returns, what is the extended tax return date and when should taxes be paid?

Avocado Corporation paid $3,000 in estimated tax payments for the calendar year ended December 31, 2018.The corporation has an actual tax liability of $4,000 for the year.​ a.If no extension is requested, when is the tax return due? b.If an extension of time to file is requested and approved, when is the tax return due? c.If an extension of time to file is requested and approved, when is the additional $1,000 of the 2018 tax due?​

On July 1, 2018, Grey formed Arucaria Corporation.On that same date, Grey contributed $100,000 cash and transferred property with an adjusted basis of $60,000 to Arucaria in exchange for 3,000 shares of the corporation's common stock.The property transferred had a fair market value of $75,000 on the date of the transfer.Arucaria Corporation had no other shares of common stock outstanding on July 1, 2018.As a result of this transaction, Grey's basis in the stock and Arucaria Corporation's basis in the property (other than the cash), respectively, are:

Which of the following companies is taxed at a flat rate of 21 percent?

The Peach Corporation is a regular corporation that contributes $25,000 cash to qualified charitable organizations during the current year.The corporation has net taxable income of $190,000 before deducting the contributions. a.​What is the amount of Peach Corporation's allowable deduction for charitable contributions for the current year? b.What may the corporation do with any excess amount of contributions?

To prevent triple taxation, a corporation is entitled to deduct 50 percent of the dividends received from other domestic corporations.

An S corporation files a Form 1120S.

In 2018, the corporate alternative minimum tax rate is 28 percent.

For its year ended December 31, 2018, Cupressa Corporation, an S corporation, had net income of $216,000 which included $180,000 of ordinary income from operations and a $36,000 net long-term capital gain.During 2018, a total of $90,000 was distributed to the corporation's nine equal shareholders, all of whom are on a calendar-year tax basis.For 2018, each shareholder should report:

During the current year, the Squamata Corporation, a regular C corporation, has $30,000 in ordinary income, a long-term capital loss of $20,000, and a short-term capital gain of $10,000.​ a.Calculate the Squamata Corporation's tax liability for the current year. b.​Explain the nature and amount of any carrybacks or carryforwards that the corporation is entitled to use.

If a corporation's status as an S corporation is involuntarily terminated in the middle of the tax year, the corporation must file an S corporation tax return for the first half of the tax year and a regular corporation tax return for the second half of the tax year.

For the year ended June 30, 2018, the Rosaceae Corporation, a regular C corporation, has a long-term capital loss of $25,000. a.​Assuming that in addition to the capital loss, the corporation has taxable income, before capital gains and losses, of $25,000 for 2018, calculate the corporation's tax liability before any credits. b.​​Assuming that in addition to the long-term capital loss of $25,000 the corporation has taxable income, before capital gains and losses, of $90,000 and a short-term capital gain of $10,000 for 2018, calculate the corporation's tax liability before any credits.

Schedule M-1 on Form 1120 shows the reconciliation of a corporation's tax liability to the tax expense on the corporation's books.

Rex and Marsha each own 50 percent of the Grandiflora Corporation, an S corporation with a calendar tax year.At the beginning of the tax year, Marsha and Rex both have a basis in the stock of the corporation of $25,000.On June 30, 2018, Rex sells his interest in the corporation to George for $200,000, and for 2018 the Grandiflora Corporation has a loss of $90,000. a.Calculate the amount of the corporation's loss that may be deducted by Rex on his 2018 tax return. b.Calculate the amount of the corporation's loss that may be deducted by George on his 2018 tax return. c.Calculate the amount of the corporation's loss that may be deducted by Marsha on her 2018 tax return.

Charitable contributions made by an S corporation are not deductible by the corporation; therefore, the shareholders receive no tax benefit from the contributions as itemized deductions.

The F.Repens Corporation has taxable income of $250,000 for the current year, including dividends of $60,000 received from 10-percent-owned domestic corporations.How much is the F.Repens Corporation's dividends received deduction for the current year?

The original due date for a tax return of a corporation filing a Form 1120 with a calendar tax year-end falls before the original due date of a return for an individual taxpayer with the same tax year.