Question 1

Even though partnerships are not subject to income tax,they are required to file income tax returns.

Accepted Answer

A) True 
 B)False

Question 2

An S corporation can be a shareholder in another corporation.

Accepted Answer

A) True 
 B)False

Question 3

Like individuals,corporations can claim both deductions for and deductions from AGI.

Accepted Answer

A) True 
 B)False

Question 4

Using the legend provided, classify each statement accordingly.
a.Applies only to the income taxation of individuals
b.Applies only to the income taxation of C corporations
c.Applies to both the income taxation of individuals and of C corporations
d.Applies to neither the income taxation of individuals nor of C corporations
-Excess capital losses cannot be offset against ordinary income.

Accepted Answer

The answer of Using the legend provided, classify each statement...

Question 5

Organizational expenditures include the costs of transferring assets to the new corporation.

Accepted Answer

A) True 
 B)False

Question 6

The domestic production activities deduction (DPAD)for a corporation is 9% of the greater of QPAI or TI.

Accepted Answer

A) True 
 B)False

Question 7

Aiden and Addison form Dove Corporation with the following investments:
From Aiden
From Addison
Cash
$800,000
Building (basis of $400,000,fair market value of $300,000)
$300,000
Land (basis of $200,000;fair market value of $500,000)
500,000
​
Dove issues stock equally to Aiden and Addison.One of the tax consequences of these transfers is:

Accepted Answer

A) Dove has a basis in the building of $400,000. 
B) Addison has a recognized loss on the building of $100,000. 
C) Addison has a basis in the Dove stock of $800,000. 
D) Addison has a recognized gain on land of $300,000 but no recognized loss on the building. 
E) None of the above. 
A) Dove has a basis in the building of $400,000. 
B) Addison has a recognized loss on the building of $100,000. 
C) Addison has a basis in the Dove stock of $800,000. 
D) Addison has a recognized gain on land of $300,000 but no recognized loss on the building. 
E) None of the above.

Question 8

As of January 1,2016,Donald,the sole shareholder of Sandpiper (a calendar year C corporation),had a basis in his stock of $50,000.During 2016,Sandpiper had an operating loss of $100,000 and distributed a $70,000 dividend to Donald.As of January 1,2016,Sandpiper had accumulated E & P of $200,000.What is Donald's basis in his Sandpiper stock as of January 1,2017?

Accepted Answer

A) ($120,000) 
B) ($20,000) 
C) $0 
D) $50,000 
E) None of the above 
A) ($120,000) 
B) ($20,000) 
C) $0 
D) $50,000 
E) None of the above

Question 9

Using the legend provided, classify each statement accordingly.
a.Applies only to the income taxation of individuals
b.Applies only to the income taxation of C corporations
c.Applies to both the income taxation of individuals and of C corporations
d.Applies to neither the income taxation of individuals nor of C corporations
-Estimated tax payments may have to be made.

Accepted Answer

The answer of Using the legend provided, classify each statement...

Question 10

In the formation of a corporation under § 351,the shareholder's basis in the stock received is decreased by loss recognized and boot received.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following rules are the same as to the income taxation of individuals and C corporations?

Accepted Answer

A) Recapture of depreciation on real property (§ 1250). 
B) Excess long-term capital losses are carried over as short-term capital losses. 
C) Dividends received deduction. 
D) The unextended due date for filing the Federal income tax return for a calendar year. 
E) None of the above. 
A) Recapture of depreciation on real property (§ 1250). 
B) Excess long-term capital losses are carried over as short-term capital losses. 
C) Dividends received deduction. 
D) The unextended due date for filing the Federal income tax return for a calendar year. 
E) None of the above.

Question 12

Under the check-the-box Regulations,an entity is allowed an annual election on how it will be treated (e.g. ,corporation,partnership)for Federal income tax purposes.

Accepted Answer

A) True 
 B)False

Question 13

Skinner Corporation,a calendar year C corporation,had the following transactions during the current year:
Income from operations
$800,000
Expenses from operations
900,000
Dividends from Siskin Corporation (20% ownership)
200,000
​
Skinner's taxable income (or NOL)for the current year is:

Accepted Answer

A) $100,000 taxable income. 
B) $40,000 NOL. 
C) $60,000 NOL. 
D) $100,000 NOL. 
E) None of the above. 
A) $100,000 taxable income. 
B) $40,000 NOL. 
C) $60,000 NOL. 
D) $100,000 NOL. 
E) None of the above.

Question 14

Why were the check-the-box Regulations issued?

Accepted Answer

The confusion over the income tax status

Question 15

Using the legend provided, classify each statement accordingly.
a.Applies only to the income taxation of individuals
b.Applies only to the income taxation of C corporations
c.Applies to both the income taxation of individuals and of C corporations
d.Applies to neither the income taxation of individuals nor of C corporations
-An excess long-term capital loss carryover is first used to offset current short-term capital gains.

Accepted Answer

The answer of Using the legend provided, classify each statement...

Question 16

In determining the taxable income (or loss)of a partnership,which,if any,of the following items must be considered?

Accepted Answer

A) Domestic production activities deduction. 
B) Charitable contributions. 
C) Qualified dividend income. 
D) Guaranteed payments to partners. 
E) None of the above. 
A) Domestic production activities deduction. 
B) Charitable contributions. 
C) Qualified dividend income. 
D) Guaranteed payments to partners. 
E) None of the above.

Question 17

Using the legend provided, classify each statement accordingly.
a.Applies only to the income taxation of individuals
b.Applies only to the income taxation of C corporations
c.Applies to both the income taxation of individuals and of C corporations
d.Applies to neither the income taxation of individuals nor of C corporations
-Recapture of depreciation on real property can be more severe.

Accepted Answer

The answer of Using the legend provided, classify each statement...

Question 18

In comparing regular C corporations with individuals,which of the following,if any,relate only to C corporations?

Accepted Answer

A) A net short-term capital gain is taxed as ordinary income. 
B) An election can be made to defer recognition of gain on an involuntary conversion under § 1033. 
C) The carryover period for excess capital losses is unlimited. 
D) Excess capital losses can be carried back. 
E) None of the above. 
A) A net short-term capital gain is taxed as ordinary income. 
B) An election can be made to defer recognition of gain on an involuntary conversion under § 1033. 
C) The carryover period for excess capital losses is unlimited. 
D) Excess capital losses can be carried back. 
E) None of the above.

Question 19

Prior to the end of its tax year,the shareholders of an S corporation either make additional capital contributions or advance funds in the form of loans.Could this shareholder activity be motivated by income tax considerations? Explain.

Accepted Answer

Yes,it could be motivated by income tax

Question 20

Guaranteed payments are deductible by the partnership and are taxable to the partner receiving the payments.

Accepted Answer

A) True 
 B)False

Even though partnerships are not subject to income tax,they are required to file income tax returns.

An S corporation can be a shareholder in another corporation.

Like individuals,corporations can claim both deductions for and deductions from AGI.

Organizational expenditures include the costs of transferring assets to the new corporation.

The domestic production activities deduction (DPAD)for a corporation is 9% of the greater of QPAI or TI.

In the formation of a corporation under § 351,the shareholder's basis in the stock received is decreased by loss recognized and boot received.

Which of the following rules are the same as to the income taxation of individuals and C corporations?

Under the check-the-box Regulations,an entity is allowed an annual election on how it will be treated (e.g. ,corporation,partnership)for Federal income tax purposes.

Skinner Corporation,a calendar year C corporation,had the following transactions during the current year: Income from operations $800,000 Expenses from operations 900,000 Dividends from Siskin Corporation (20% ownership) 200,000 Skinner's taxable income (or NOL)for the current year is:

Why were the check-the-box Regulations issued?

In determining the taxable income (or loss)of a partnership,which,if any,of the following items must be considered?

In comparing regular C corporations with individuals,which of the following,if any,relate only to C corporations?

Prior to the end of its tax year,the shareholders of an S corporation either make additional capital contributions or advance funds in the form of loans.Could this shareholder activity be motivated by income tax considerations? Explain.

Guaranteed payments are deductible by the partnership and are taxable to the partner receiving the payments.

An Introduction to Taxation and Understanding the Federal Law

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income Concepts and Inclusions

Gross Income Exclusions

Deductions and Losses in General

Deductions and Losses Certain Business Expenses and Losses

Depreciation Cost Recovery Amortization and Depletion

Deductions Employee and Self Employed Related Expenses

Deduction and Losses Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions Determination of Gain and Loss and Basic Considerations

Property Transactions Nontaxable Exchanges

Property Transactions Capital Gains and Losses

Property Transactions Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Filters

Exam 20: Corporations and Partnerships

Even though partnerships are not subject to income tax,they are required to file income tax returns.

An S corporation can be a shareholder in another corporation.

Like individuals,corporations can claim both deductions for and deductions from AGI.

Organizational expenditures include the costs of transferring assets to the new corporation.

The domestic production activities deduction (DPAD)for a corporation is 9% of the greater of QPAI or TI.

In the formation of a corporation under § 351,the shareholder's basis in the stock received is decreased by loss recognized and boot received.

Which of the following rules are the same as to the income taxation of individuals and C corporations?

Under the check-the-box Regulations,an entity is allowed an annual election on how it will be treated (e.g. ,corporation,partnership)for Federal income tax purposes.

Skinner Corporation,a calendar year C corporation,had the following transactions during the current year: Income from operations $800,000 Expenses from operations 900,000 Dividends from Siskin Corporation (20% ownership) 200,000 ​ Skinner's taxable income (or NOL)for the current year is:

Why were the check-the-box Regulations issued?

In determining the taxable income (or loss)of a partnership,which,if any,of the following items must be considered?

In comparing regular C corporations with individuals,which of the following,if any,relate only to C corporations?

Prior to the end of its tax year,the shareholders of an S corporation either make additional capital contributions or advance funds in the form of loans.Could this shareholder activity be motivated by income tax considerations? Explain.

Guaranteed payments are deductible by the partnership and are taxable to the partner receiving the payments.

An Introduction to Taxation and Understanding the Federal Law

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income Concepts and Inclusions

Gross Income Exclusions

Deductions and Losses in General

Deductions and Losses Certain Business Expenses and Losses

Depreciation Cost Recovery Amortization and Depletion

Deductions Employee and Self Employed Related Expenses

Deduction and Losses Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions Determination of Gain and Loss and Basic Considerations

Property Transactions Nontaxable Exchanges

Property Transactions Capital Gains and Losses

Property Transactions Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Filters

Skinner Corporation,a calendar year C corporation,had the following transactions during the current year: Income from operations $800,000 Expenses from operations 900,000 Dividends from Siskin Corporation (20% ownership) 200,000 Skinner's taxable income (or NOL)for the current year is: