Exam 16: Corporations

A corporation has a tax year ending December 31,2017.When is the due date for the corporate income tax return (with no extensions)?

Major Corporation's taxable income for the current year is $335,000.Its tax liability 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.

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

A calendar-year corporation has a $75,000 current E&P amount,and a $25,000 positive accumulated E&P balance at the beginning of the year.Shareholders of the corporation have a total basis in outstanding shares of $40,000.The corporation pays a $120,000 distribution to the shareholders.The tax results to the shareholders will be

A corporation earns $500,000 of current E&P and has an accumulated deficit of $300,000.The corporation pays a $350,000 distribution to its shareholders this year.$200,000 of the distribution will be taxed as a dividend.

A liquidating corporation

A corporation is owned 70% by Jones and 30% by Smith.Jones owns 70 shares with a cost of $100 each.Smith owns 30 shares with a cost of $100 per share.Smith and Jones are not related.The company redeems Smith's 30 shares at a redemption price of $400 per share.No stock is redeemed from Jones.This is not a redemption to pay death taxes,and it is not a partial liquidation.Smith will recognize

Chi transfers assets with a $150,000 FMV (basis $80,000) and $100,000 of business-related liabilities to a corporation in exchange for 100% of the corporation's stock with a FMV of $50,000.The corporation assumes the $100,000 mortgage. a.What is the amount of gain recognized by Chi? b.What is the adjusted basis of the stock received by Chi? c.What is the basis of the assets to the corporation?

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?

If a corporation reports both a NLTCG and a NSTCG after netting all capital gains and losses,both the NLTCG and the NSTCG are subject to tax at rates applicable to ordinary income.

Corporate charitable contributions are limited in any given year to 50% of taxable income.

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

Louisiana Land Corporation reported the following results for the current year: What is the amount of the taxable income for the current year?

Individuals Gayle and Marcus form GM Corporation.Gayle transfers land and a building with a $750,000 adjusted basis and a $830,000 FMV in exchange for 50% of the stock of the GM Corporation worth $800,000 and a $30,000 note.Marcus transfers cash of $830,000 for 50% of the stock worth $800,000 and a note of the GM Corporation valued at $30,000.The basis of the land and building to GM Corporation is

Common AMT adjustments for corporations include all of the following except

Dividends paid from E&P are taxable to shareholders and are,therefore,deductible by the corporation.

A publicly held corporation is denied a deduction for compensation paid to its chief executive officer and its four highest compensated officers if the compensation amount for any individual exceeds $1,000,000 per year.

In a parent-subsidiary controlled group,the common parent corporation must own at least 80% of the stock of each subsidiary corporation in the group.

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.