Exam 3: The Corporate Income Tax

Dexter Corporation reports the following results for the current year: In addition,Dexter has a $25,000 NOL carryover from the preceding tax year.What is Dexter's taxable income for the current year?

Which of the following is not subject to classification as a personal service corporation?

What are start-up expenditures?

Prince Corporation donates inventory having an adjusted basis of $26,000 and an FMV of $40,000 to County Hospital,which is a qualified public charity.What is the amount of Prince's deduction?

Joker Corporation owns 80% of Klue Corporation.Joker Corporation also owns 45% of Lion Corporation and 45% of Mark Corporation.Klue Corporation owns 40% of Lion Corporation and 10% of Mark Corporation.Which corporations are members of a controlled group?

Island Corporation has the following income and expense items for the year: The taxable income of Island Corporation is

Quality Corporation,a regular corporation,has an opportunity to realize $50,000 of additional income in either the current year or next year.What tax issues need to be considered in determining when to realize the income?

Identify which of the following statements is true.

A deferred tax asset indicates that a firm will realize the tax benefit of an event sometime in the future.

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.

Zeta Corporation received a $150,000 dividend from Omega Corporation this year.Zeta owns 10% of Omega's single class of stock.What tax issues should Zeta consider with respect to its dividend income?

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

Identify which of the following statements is false.

Vanda Corporation sold a truck with an adjusted basis of $50,000 to Barbara for $30,000.Vanessa owns 25% of the Vanda stock.What tax issues should Vanda and Vanessa consider with respect to the sale/purchase?

Andy owns 20% of North Corporation and 60% of Tent Corporation.North and Tent have only one class of stock outstanding.Barbara owns 50% of North Corporation and 20% of Tent Corporation.North and Tent Corporations will be brother-sister corporations if

If a corporation's charitable contributions exceed the deduction limitation in a particular year,the excess

During the year,Soup Corporation contributes some of its inventory to a qualified charity for use in feeding the needy.The inventory has an FMV of $85,000 and an adjusted basis of $25,000.What is the amount of Soup Corporation's charitable contribution deduction for the donation of the inventory as determined without regard to the overall charitable contribution limitation?

Dumont Corporation reports the following results in the current year: What is Dumont's taxable income?

James Corporation purchased residential real estate in 2007 for $225,000,of which $25,000 was allocated to land and $200,000 was allocated to the building.James Corporation took straight-line MACRS deductions of $30,000 during the years 2005-2009.In 2012,James Corporation sold the property for $285,000,of which $60,000 is allocated to the land and $225,000 is allocated to the building.What are the amounts and character of James Corporation's recognized gain or loss on the sale?

Exam Corporation reports taxable income of $800,000 on its federal income tax return.Given the following information from the corporation's records,determine its book income. Deduction for federal income taxes per