Exam 16: Corporations

Tester Corporation acquired all of the stock of Socco Corporation five years ago for $400,000.Socco Corporation has been completely liquidated this year,and all of its assets have been transferred to Tester Corporation.Immediately prior to the liquidation,Socco had an adjusted basis in its assets of $560,000,and the assets were worth $700,000. a.How much gain or loss will Socco recognize due to the liquidation? b.How much gain or loss will Tester recognize due to the liquidation? c.What is Tester's adjusted basis in the assets received from Socco?

Sycamore Corporation's financial statements show the following items for the current year in its financial accounting records: For tax purposes,depreciation is $22,000.Sycamore owns less than 20% of the company from which it received dividends.Calculate Sycamore's taxable income,tax liability,and carryforwards.

A corporation realizes a NSTCL this year of $43,000.It will only be able to deduct $3,000 this year.

Topper Corporation makes a liquidating distribution of land to its sole shareholder Tonya.Topper purchased the land several years ago for $150,000,and the land was recently appraised at $120,000 of value.Tonya purchased her stock three years ago for $65,000.What is the amount of gains or losses recognized by Topper Corporation and Tonya?

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 that Charades may deduct?

Which of the statements is inaccurate regarding requirements for nonrecognition of gain or loss upon the transfer of assets to a corporation in exchange for stock?

Ohio Corporation's taxable income for the current year is $300,000.Its tax liability is

A corporation distributes land worth $200,000 to its sole shareholder.The corporation had purchased the land several years ago for $120,000.The corporation has over $1 million of E&P.How much income will the corporation and the shareholder recognize?

Corporations that are members of a brother-sister affiliated group may file a consolidated return if the proper election is made.

Musketeer Corporation has the following income and expense items during the current year: The allowed dividends-received deduction is

Bartlett Corporation,a U.S.manufacturer,reports the following results in its financial accounting records: The dividend income is from very minor holdings in U.S.stocks.Calculate Bartlett's taxable income,income tax liability and any carryovers generated.

Which corporations are required to file a Schedule M-3?

Manatee Corporation,a retailer,is owned equally by twelve unrelated individuals.Its taxable income this year is $100,000 and its regular federal income tax liability is $22,250.The company claims a $20,000 dividends-received deduction and pays $25,000 dividends to its shareholders.The corporation had accumulated earnings and profits of $200,000 at the end of the preceding year.The company has reasonable needs of the business at year-end of $210,000.The accumulated earnings tax is

A new start-up corporation is formed by three individuals.They expect the corporation will experience losses in its first few years.The shareholders will prefer to have the corporation taxed as a C corporation rather than making an S election.

Trestle Corp.received $100,000 of dividend income from minor holdings (less than 20%) in U.S.publicly traded corporations.Determine the allowable dividend-received deduction under the following assumptions of net income from operations: a. Net income from operations is $600,000. b. Net income from operations is ($10,000). c. Net income from operations is ($150,000).

Atlantic Corporation,a calendar-year taxpayer,has $120,000 of accumulated E&P deficit as of January 1.Atlantic's current E&P is $40,000.The corporation makes a $50,000 distribution to its shareholders.Shareholders have stock basis of $60,000.What is the amount of Atlantic's E&P deficit at the end of the year?

A corporation which makes a charitable contribution of property for the care of the needy gets a deduction equal to the adjusted basis of the property.

A corporation distributes land with a FMV of $85,000 (basis $50,000).The land has a mortgage of $95,000 assumed by the shareholder.Gain to the corporation is

Greg Corporation,an accrual method taxpayer,had accumulated earnings and profits of $300,000 as of December 31 last year.For its current tax year,Greg's books and records reflect the following: Based on the above,what is the amount of Greg Corporation's current earnings and profits for this year?

A shareholder receives a distribution from a corporation in complete liquidation.The distribution will be taxed as a dividend to the extent of current or accumulated E&P.