Exam 3: the Corporate Income Tax

Garth Corporation donates inventory having an adjusted basis of $40,000 and an FMV of $150,000 to a qualified public charity.The inventory will be used by the charity to care for the ill.The maximum charitable contribution deduction before consideration of the 10% limitation is

Miller Corporation has gross income of $100,000,which includes $40,000 of dividends from a 10%-owned corporation.In addition,Miller has $80,000 of expenses.Miller's taxable income or loss is

Courtney Corporation had the following income and expenses for the tax year: Courtney had taxable income for the past three years of: a)Determine the corporation's NOL for the current year. b)Determine the amount of NOL carried back to each preceding tax year and the amount of NOL,if any,available as a carryforward.

Identify which of the following statements is true.

Cricket Corporation has a $50,000 NOL in the current year.Cricket's taxable income in each of the previous two years was $25,000.Cricket expects its taxable income for next year to exceed $400,000.What issues should be considered with respect to the use of the NOL?

Organizational expenditures include all of the following except for

If a controlling shareholder sells depreciable property to a controlled corporation and the property is depreciable by the purchaser,any gain on the sale is a 1231 gain.

Identify which of the following statements is true.

Bermuda Corporation reports the following results in 2009 and 2010: What is Bermuda's contribution deduction in 2011 and 2012? What is the disposition of any remaining amount?

Ryan Corporation sells a commercial building and land.The sales proceeds attributable to the building is $145,000.When purchased,the building is allocated $75,000 of the purchase price.The firm has depreciated the building using the MACRS rules.The MACRS deductions taken total $60,000.What is the amount and character of Ryan's recognized gain?

Identify which of the following statements is false.

Paul,who owns all the stock in Rodgers Corporation,purchases a truck from the corporation in January.The truck cost $11,000 and has an adjusted basis of $9,000.Paul pays Rodgers the truck's $7,000 FMV.Paul sells the truck later in the tax year to an unrelated party for $12,000.What is the amount and character of the income that Paul will report on this year's tax return?

Lass Corporation reports a $25,000 net capital loss this year.The corporation reports the following net capital gains during the past three years. Determine the amount of net capital loss carried back to each preceding tax year and the amount of capital loss,if any,available as a carryforward.

Which of the following items will not create a deferred tax liability?

Blueboy Inc.contributes inventory to a qualified charity for use in feeding the needy.The inventory has a $70,000 FMV and a $30,000 adjusted basis.Blueboy Inc.can take a charitable contribution deduction of

What impact does an NOL carryforward have on the proper sequencing of deductions to compute corporate taxable income?

An election to forgo an NOL carryback must be made on or before the return due date (including extensions)for the year in which the NOL is incurred.

Identify which of the following statements is true.

Sun and Moon Corporations each have only one class of stock outstanding.Their stock ownership is shown below. Which of the four stock ownership changes that are illustrated is the minimum change that is needed if Sun and Moon Corporations are to be brother-sister corporations under the 50% requirements? (Assume the two corporations are equally valued. )

A new corporation may generally select one of the following accounting methods with the exception of