Exam 16: Corporations

Individuals Julie and Brandon form JB Corporation.Julie transfers cash of $425,000 in exchange for 50% of the stock of the JB Corporation worth $410,000 and a $15,000 note.Brandon transfers equipment with a $390,000 adjusted basis and a $425,000 FMV for 50% of the stock worth $410,000 and a note of the JB Corporation valued at $15,000.Brandon's basis in the stock received is

Identify which of the following statements is true.

Chocolat Inc.is a U.S.chocolate manufacturer.Its domestic production income is $4,000,000.Taxable income before the domestic production deduction is $3,000,000.What is the amount of the production activities deduction?

The books and records of Finton Corporation,an accrual method taxpayer,reflect the following: Based on the above,what is the amount of Greg Corporation's current earnings and profits for this year?

The corporate AMT rate is 26% on the first $186,300 of tax base and 28% on the balance.

A calendar-year corporation has a $15,000 current E&P deficit and a $40,000 positive accumulated E&P balance.The shareholders of the corporation have a total basis in outstanding shares of $30,000.A $75,000 distribution is made to the shareholders on the last day of the year.The tax results to the shareholders will be

Depreciation recapture does not apply to a transfer coming under Sec.351 unless the transferor recognizes gain on depreciable property that is transferred.

Hazel Corporation reported the following results for the current year: Taxable income before the dividends-received deduction What is the amount of the taxable income for the current year and what is the amount of the charitable contributions carryforward to next year?

Which of the following statements regarding corporate tax return schedules is correct?

The accumulated earnings tax is imposed on all publicly held corporations.

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

Small Corporation had the following capital gains and losses during the current year: Taxable income,exclusive of the capital gains and losses above,is $68,000. a.How should the capital gains and losses be treated for the current year? b.What is the taxable income for the current year taking into consideration the capital gains and losses?

For purposes of the accumulated earnings tax,reasonable needs of the business include all of the following with the exception of

Dixie Corporation distributes $31,000 to its sole shareholder,Sally.At the time of the distribution,Dixie's E&P is $25,000 and Sally's basis in her Dixie stock is $10,000.Sally's basis in her Dixie stock after the distribution is

Income of a C corporation is subject to an initial tax at the corporate level and the shareholders are subject to a second tax if the corporation pays dividends from its earnings and profits.

All of the following business forms offer limited liability except the

Whaler Corporation makes a liquidating distribution of land with a $70,000 adjusted basis and a $100,000 FMV to shareholder Horton,who surrenders his Whaler stock (adjusted basis $60,000) to the corporation.Alice,another shareholder,receives $100,000 cash for her shares ($115,000 adjusted basis). a.What are the tax consequences to Whaler Corporation? b.What are the tax consequences to both Horton and Alice? c.What is Horton's basis in the land?

The corporate tax return has been prepared for Go Corporation,which showed taxable income of $60,000.Prior to mailing the return,you learn that Go Corporation and Fish Corporation are owned by the same stockholders.Since Go Corp.and Fish Corp.are brother-sister corporations,it will be necessary for you to recompute the tax liability for Go Corporation,based on an equal apportionment of the lower tax rates.What will be the corrected tax liability for Go Corporation?

John transfers assets with a $200,000 FMV (basis $160,000) and $170,000 of business-related liabilities to a corporation in exchange for 100% of the corporation's stock with a FMV of $130,000.The corporation assumes the $170,000 mortgage.The transfer qualifies under Sec.351.What is the corporation's basis in the property?

What factors are considered in determining whether a redemption will be treated as an exchange subject to capital gain or loss treatment?