Exam 32: Corporations

Individuals Terry and Jim form TJ Corporation.Terry transfers cash of $930,000 in exchange for 50% of the stock of the TJ Corporation worth $900,000 and a $30,000 note.Jim transfers equipment with a $890,000 adjusted basis and a $930,000 FMV for 50% of the stock worth $900,000 and a note of the TJ Corporation valued at $30,000.The basis of the equipment to TJ Corporation is

Amherst Medical P.C. ,an incorporated group of physicians,reports taxable income of $100,000.Its corporate income tax will be $35,000.

A corporation is classified as a personal holding company.Its taxable income is $300,000 and its regular federal income tax liability is $100,250.The company claims a $40,000 dividends-received deduction and pays $30,000 dividends to its shareholders.The personal holding company tax is

Corporations must divide their deductions between deductions for and deductions from AGI.

Dozen Corporation is owned equally by twelve unrelated individuals.Its taxable income this year is $100,000 and its regular federal income tax liability is $22,250.The company claims a $20,000 dividends-received deduction and pays $25,000 dividends to its shareholders.The corporation had accumulated earnings and profits of $900,000 at the end of the preceding year.The company has no reasonable needs of the business.The accumulated earnings tax is

If a corporation has no E&P,a distribution is ordinary income to the extent of the shareholder's basis with any excess treated as capital gain.

Accrual-basis corporations may accrue a charitable contribution deduction in the year preceding payment if the payment is authorized by the board of directors prior to year-end and the contribution is made within 2 1/2 months following year-end.

If a corporation receives dividends from an 80% or more owned affiliated corporation,the dividends-received deduction is 100%.

Charades Corporation is a publicly held company listed on the New York Stock Exchange.During the current year,its chief executive officer,Samantha Chen,receives the following compensation from the corporation: salary,$1,500,000; commissions based on sales generated by Samantha,$200,000; payments to a qualified pension plan,$30,000; and tax-free fringe benefits,$20,000.What is the total amount taxable to Samantha?

For corporations,both NLTCLs and NSTCLs are eligible for a 3-year carryback and a 5-year carryforward as an offset against capital gains for those years.

All of the following business forms offer limited liability except the

John transfers assets with a $200,000 FMV (basis $160,000)and $170,000 of business-related liabilities to a corporation in exchange for 100% of the corporation's stock with a FMV of $130,000.The corporation assumes the $170,000 mortgage.The transfer qualifies under Sec.351.What is the corporation's basis in the property?

Income of a C corporation is subject to an initial tax at the corporate level and the shareholders are subject to a second tax if the corporation pays dividends from its earnings and profits.

In the current year,Bosc Corporation has taxable income of $100,000,and its regular tax liability is $22,250.Bartlett's AMT adjustments other than ACE are $70,000,and it has $320,000 of adjusted current earnings.What is the amount of Bosc Corporation's AMT liability?

If a corporation distributes appreciated property to its shareholders,the corporation will recognize any realized gain.

A corporation's E&P is equal to its taxable income for the year.

A corporation which makes a charitable contribution of property for the care of the needy gets a deduction equal to the adjusted basis of the property.

Manatee Corporation,a retailer,is owned equally by twelve unrelated individuals.Its taxable income this year is $100,000 and its regular federal income tax liability is $22,250.The company claims a $20,000 dividends-received deduction and pays $25,000 dividends to its shareholders.The corporation had accumulated earnings and profits of $200,000 at the end of the preceding year.The company has reasonable needs of the business at year-end of $210,000.The accumulated earnings tax is

When computing a corporation's alternative minimum taxable income,its taxable income is

Tara transfers land with a $600,000 adjusted basis and a $700,000 FMV to a corporation in a Sec.351 transfer.Immediately after the transfer,Tara owns 100% of the corporation-stock with a FMV of $660,000.In addition,Tara's $40,000 principal balance on her student loan is legally assumed by the corporation as part of the overall transfer.No other property is transferred.Tara's recognized gain on the transfer is