Question 1

Door Corporation's alternative minimum taxable income before the statutory exemption is $200,000.What is Door's tentative minimum tax before credits?

Accepted Answer

The answer of Door Corporation's alternative minimum taxable income before...

Question 2

Identify which of the following statements is false.

Accepted Answer

A)  The corporate AMT produces relatively little tax revenue. 
B)  The small corporation AMT exemption exempts 95% of all corporations from the AMT. 
C)  The corporate AMT is similar to the AMT for individuals. 
D)  The starting point for computing a corporation's AMT is book income. 
A)  The corporate AMT produces relatively little tax revenue. 
B)  The small corporation AMT exemption exempts 95% of all corporations from the AMT. 
C)  The corporate AMT is similar to the AMT for individuals. 
D)  The starting point for computing a corporation's AMT is book income.

Question 3

Identify which of the following statements is true.

Accepted Answer

A)  The personal holding company taxes that are paid by a corporation can be used as a credit against its regular tax amount. 
B)  Whether a corporation is subject to the personal holding company tax is determined by using two objective tests, while the determination of whether a corporation is subject to the accumulated earnings tax is determined subjectively. 
C)  Income from personal service contracts are not included in personal holding company income. 
D)  All of the above are false. 
A)  The personal holding company taxes that are paid by a corporation can be used as a credit against its regular tax amount. 
B)  Whether a corporation is subject to the personal holding company tax is determined by using two objective tests, while the determination of whether a corporation is subject to the accumulated earnings tax is determined subjectively. 
C)  Income from personal service contracts are not included in personal holding company income. 
D)  All of the above are false.

Question 4

Foggy Corporation has regular taxable income of $1,200,000.It has $250,000 of interest income on private activity bonds and $100,000 of interest on City of New Orleans bonds.How much is Foggy's preadjustment AMTI?

Accepted Answer

A)  $1,200,000 
B)  $1,350,000 
C)  $1,450,000 
D)  $1,550,000 
A)  $1,200,000 
B)  $1,350,000 
C)  $1,450,000 
D)  $1,550,000

Question 5

Identify which of the following statements is false.

Accepted Answer

A)  The 80% dividends-received deduction can be claimed when computing a corporation's undistributed personal holding company income (UPHCI). 
B)  Rental expenses in excess of rental income are added back to taxable income to arrive at personal holding company income (PHCI). 
C)  Wind Corporation is a personal holding company. Its taxable income for this year is $100,000. The corporation's charitable contributions are $5,000 greater than its income tax charitable contribution deduction limitation. Wind's UPHCI is $95,000, assuming no other adjustments must be made. 
D)  The PHC tax is assessed at 20%. 
A)  The 80% dividends-received deduction can be claimed when computing a corporation's undistributed personal holding company income (UPHCI). 
B)  Rental expenses in excess of rental income are added back to taxable income to arrive at personal holding company income (PHCI). 
C)  Wind Corporation is a personal holding company. Its taxable income for this year is $100,000. The corporation's charitable contributions are $5,000 greater than its income tax charitable contribution deduction limitation. Wind's UPHCI is $95,000, assuming no other adjustments must be made. 
D)  The PHC tax is assessed at 20%.

Question 6

Barker Corporation,a personal service company,has $200,000 of taxable income.Barker has tax preferences and positive adjustments of $200,000 and negative adjustments of $140,000 for alternative minimum tax purposes.No credits are available.Barker's regular tax liability is $70,000.What is the tentative minimum tax amount?

Accepted Answer

The answer of Barker Corporation,a personal service company,has $200,000 of...

Question 7

Which of the following actions cannot be used to eliminate a potential accumulated earnings tax liability situation involving a corporation owned by a mother and a father?

Accepted Answer

A)  Create plans to invest retained earnings in a plant expansion. 
B)  Make a cash distribution within 2 1/2 months after the end of the tax year. 
C)  Make a deficiency distribution within 90 days of the date on which the IRS determines that an accumulated earnings tax liability is owed. 
D)  Liquidate the corporation. 
A)  Create plans to invest retained earnings in a plant expansion. 
B)  Make a cash distribution within 2 1/2 months after the end of the tax year. 
C)  Make a deficiency distribution within 90 days of the date on which the IRS determines that an accumulated earnings tax liability is owed. 
D)  Liquidate the corporation.

Question 8

Foster Corporation has gross income for regular tax purposes of $100,000,which includes a net Sec.1231 gain of $10,000 and a net capital gain of $10,000.Ordinary gross income for personal holding company purposes is

Accepted Answer

A)  $70,000. 
B)  $80,000. 
C)  $90,000. 
D)  $100,000. 
A)  $70,000. 
B)  $80,000. 
C)  $90,000. 
D)  $100,000.

Question 9

The personal holding company tax

Accepted Answer

A)  may be imposed regardless of the number of equal stockholders in a corporation. 
B)  may be eliminated by the payment of a deficiency dividend. 
C)  qualifies as a tax credit, which may be used by the shareholders to reduce their individual income taxes. 
D)  applies to any corporation whose shareholders satisfy the stock ownership requirement. 
A)  may be imposed regardless of the number of equal stockholders in a corporation. 
B)  may be eliminated by the payment of a deficiency dividend. 
C)  qualifies as a tax credit, which may be used by the shareholders to reduce their individual income taxes. 
D)  applies to any corporation whose shareholders satisfy the stock ownership requirement.

Question 10

Which of the following entities is subject to the accumulated earnings tax?

Accepted Answer

A)  Sec. 501 tax-exempt corporation 
B)  personal holding company 
C)  C corporation 
D)  S corporation 
A)  Sec. 501 tax-exempt corporation 
B)  personal holding company 
C)  C corporation 
D)  S corporation

Question 11

All of the following are recognized as reasons for accumulating earnings except

Accepted Answer

A)  working capital needs. 
B)  product liability loss reserves. 
C)  redemption of stock of deceased shareholder. 
D)  All of the above are recognized reasons for accumulating earnings. 
A)  working capital needs. 
B)  product liability loss reserves. 
C)  redemption of stock of deceased shareholder. 
D)  All of the above are recognized reasons for accumulating earnings.

Question 12

Identify which of the following statements is true.

Accepted Answer

A)  The ACE adjustment is required of S corporations. 
B)  The 70% dividends-received deduction reduces preadjustment AMTI to arrive at ACE. 
C)  The 80% dividends-received deduction can be claimed when computing a corporation's adjusted current earnings (AC
E) . 
D)  All of the above are false. 
A)  The ACE adjustment is required of S corporations. 
B)  The 70% dividends-received deduction reduces preadjustment AMTI to arrive at ACE. 
C)  The 80% dividends-received deduction can be claimed when computing a corporation's adjusted current earnings (AC
E) . 
D)  All of the above are false.

Question 13

Identify which of the following statements is false.

Accepted Answer

A)  Askew Corporation has ten unrelated shareholders, each of whom owns 10% of the outstanding stock. This corporation is a personal holding company. 
B)  Stock owned by an individual, in addition to stock attributed from her spouse, parents, children, and siblings, are all counted towards whether or not the personal holding company stock ownership test has been met. 
C)  S corporations and tax-exempt organizations are excluded from the personal holding company (PH
C)  definition. 
D)  A person who holds an option to acquire stock is considered to own the stock for purposes of the PHC stock requirements. 
A)  Askew Corporation has ten unrelated shareholders, each of whom owns 10% of the outstanding stock. This corporation is a personal holding company. 
B)  Stock owned by an individual, in addition to stock attributed from her spouse, parents, children, and siblings, are all counted towards whether or not the personal holding company stock ownership test has been met. 
C)  S corporations and tax-exempt organizations are excluded from the personal holding company (PH
C)  definition. 
D)  A person who holds an option to acquire stock is considered to own the stock for purposes of the PHC stock requirements.

Question 14

Identify which of the following statements is true.

Accepted Answer

A)  A corporation can be subject to both the accumulated earnings tax and the personal holding company tax in the same year. 
B)  The accumulated earnings tax is applied to a corporation's earnings. If the earnings are not subsequently distributed, the earnings will be taxed again under the accumulated earnings tax the next year. 
C)  The accumulated earnings tax is not levied on the corporation's total accumulated earnings balance, but only on its current-year addition to the balance. 
D)  All of the above are false. 
A)  A corporation can be subject to both the accumulated earnings tax and the personal holding company tax in the same year. 
B)  The accumulated earnings tax is applied to a corporation's earnings. If the earnings are not subsequently distributed, the earnings will be taxed again under the accumulated earnings tax the next year. 
C)  The accumulated earnings tax is not levied on the corporation's total accumulated earnings balance, but only on its current-year addition to the balance. 
D)  All of the above are false.

Question 15

Which of following generally does not indicate an unreasonable earnings accumulation?

Accepted Answer

A)  loans to shareholders 
B)  expenditure of corporate funds for the personal benefit of the shareholders 
C)  planned expansion of business facilities 
D)  investments in properties or securities unrelated to the activities of the corporation 
A)  loans to shareholders 
B)  expenditure of corporate funds for the personal benefit of the shareholders 
C)  planned expansion of business facilities 
D)  investments in properties or securities unrelated to the activities of the corporation

Question 16

Identify which of the following statements is true.

Accepted Answer

A)  In practice, the accumulated earnings tax applies only to closely held corporations. 
B)  A corporation bears the burden of proving that its earnings are not being accumulated to avoid income taxes. 
C)  To avoid the accumulated earnings tax, a corporation needs to have a definite plan for expending the accumulated earnings. 
D)  All of the above are true. 
A)  In practice, the accumulated earnings tax applies only to closely held corporations. 
B)  A corporation bears the burden of proving that its earnings are not being accumulated to avoid income taxes. 
C)  To avoid the accumulated earnings tax, a corporation needs to have a definite plan for expending the accumulated earnings. 
D)  All of the above are true.

Question 17

The personal holding company penalty tax rate is

Accepted Answer

A)  20%. 
B)  10%. 
C)  15%. 
D)  35%. 
A)  20%. 
B)  10%. 
C)  15%. 
D)  35%.

Question 18

Mountaineer,Inc.has the following results:   What is the amount of the alternative minimum tax?

Accepted Answer

A)  $0 
B)  $60,000 
C)  $100,000 
D)  none of the above 
A)  $0 
B)  $60,000 
C)  $100,000 
D)  none of the above

Question 19

Dragon Corporation reports a distribution on its return from the third previous year as a stock redemption producing a capital gain.When the return is audited during the current year,the distribution of the third previous year is characterized by the IRS as a dividend.This change causes Dragon Corporation to be classified as a personal holding company for the third previous year.Which of the following statements is correct?

Accepted Answer

A)  Dragon Corporation will owe interest and/or underpayment penalty even if the PHC tax is avoided by a deficiency dividend. 
B)  Dragon Corporation will owe no interest and/or underpayment penalty if the PHC tax is avoided by a deficiency dividend. 
C)  A deficiency dividend is not permitted to be paid by Dragon. 
D)  A dividend must be paid within 120 days of establishing the PHC tax liability and a claim for a dividends-paid deduction must be filed within 90 days of the determination date. 
A)  Dragon Corporation will owe interest and/or underpayment penalty even if the PHC tax is avoided by a deficiency dividend. 
B)  Dragon Corporation will owe no interest and/or underpayment penalty if the PHC tax is avoided by a deficiency dividend. 
C)  A deficiency dividend is not permitted to be paid by Dragon. 
D)  A dividend must be paid within 120 days of establishing the PHC tax liability and a claim for a dividends-paid deduction must be filed within 90 days of the determination date.

Question 20

Identify which of the following statements is true.

Accepted Answer

A)  A deficiency dividend is included in the shareholder's gross income for his/her tax year that includes the last day of the tax year in which the personal holding company claims a dividends-paid deduction. 
B)  A shareholder who receives a deficiency dividend must report the dividend as gross income for the tax year that includes the last day of the distributing corporation's tax year on which it was a PHC. 
C)  A personal holding company's payment of a deficiency dividend eliminates its need to pay the personal holding company tax as well as any interest and underpayment penalties on the tax deficiency. 
D)  All of the above are false. 
A)  A deficiency dividend is included in the shareholder's gross income for his/her tax year that includes the last day of the tax year in which the personal holding company claims a dividends-paid deduction. 
B)  A shareholder who receives a deficiency dividend must report the dividend as gross income for the tax year that includes the last day of the distributing corporation's tax year on which it was a PHC. 
C)  A personal holding company's payment of a deficiency dividend eliminates its need to pay the personal holding company tax as well as any interest and underpayment penalties on the tax deficiency. 
D)  All of the above are false.

Door Corporation's alternative minimum taxable income before the statutory exemption is $200,000.What is Door's tentative minimum tax before credits?

Identify which of the following statements is false.

Identify which of the following statements is true.

Foggy Corporation has regular taxable income of $1,200,000.It has $250,000 of interest income on private activity bonds and $100,000 of interest on City of New Orleans bonds.How much is Foggy's preadjustment AMTI?

Identify which of the following statements is false.

Which of the following actions cannot be used to eliminate a potential accumulated earnings tax liability situation involving a corporation owned by a mother and a father?

Foster Corporation has gross income for regular tax purposes of $100,000,which includes a net Sec.1231 gain of $10,000 and a net capital gain of $10,000.Ordinary gross income for personal holding company purposes is

The personal holding company tax

Which of the following entities is subject to the accumulated earnings tax?

All of the following are recognized as reasons for accumulating earnings except

Identify which of the following statements is true.

Identify which of the following statements is false.

Identify which of the following statements is true.

Which of following generally does not indicate an unreasonable earnings accumulation?

Identify which of the following statements is true.

The personal holding company penalty tax rate is

Mountaineer,Inc.has the following results: What is the amount of the alternative minimum tax?

Identify which of the following statements is true.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

US Taxation of Foreign-Related Transactions

Filters

Exam 5: Other Corporate Tax Levies

Door Corporation's alternative minimum taxable income before the statutory exemption is $200,000.What is Door's tentative minimum tax before credits?

Identify which of the following statements is false.

Identify which of the following statements is true.

Foggy Corporation has regular taxable income of $1,200,000.It has $250,000 of interest income on private activity bonds and $100,000 of interest on City of New Orleans bonds.How much is Foggy's preadjustment AMTI?

Identify which of the following statements is false.

Which of the following actions cannot be used to eliminate a potential accumulated earnings tax liability situation involving a corporation owned by a mother and a father?

Foster Corporation has gross income for regular tax purposes of $100,000,which includes a net Sec.1231 gain of $10,000 and a net capital gain of $10,000.Ordinary gross income for personal holding company purposes is

The personal holding company tax

Which of the following entities is subject to the accumulated earnings tax?

All of the following are recognized as reasons for accumulating earnings except

Identify which of the following statements is true.

Identify which of the following statements is false.

Identify which of the following statements is true.

Which of following generally does not indicate an unreasonable earnings accumulation?

Identify which of the following statements is true.

The personal holding company penalty tax rate is

Mountaineer,Inc.has the following results: What is the amount of the alternative minimum tax?

Identify which of the following statements is true.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

US Taxation of Foreign-Related Transactions

Filters