Exam 16: Corporations

A corporation may make an election to forego the NOL carryback in order to carry the NOL forward only.

In a Sec.351 transfer,the corporation takes the shareholder's adjusted basis in the contributed property,regardless of whether the property's FMV is greater than or less than its adjusted basis at the date of contribution.

By calculating its depreciation on personal property using the most accelerated method available,a corporation increases the likelihood that it will be subject to the alternative minimum tax.

A corporation realizes a NLTCL this year.The loss cannot be deducted in the current year.It must be carried back two years and then carried forward 20 years.

For this tax year,Madison Corporation had taxable income of $80,000 before using any of the net operating loss from the previous year.Madison has never elected to forgo the carryback of its losses since incorporation five years ago.Madison's books and records reflect the following income (loss) since its incorporation. What amount of taxable income (loss) should Madison report on its current tax return?

Various members of Congress favor a reduction in the corporate tax rate to improve competitiveness and have proposed legislation to lower corporate income tax rates.Assume the legislation is enacted,and corporate tax rates are reduced.If a C corporation,which normally generates taxable income of $300,000 or higher and has expectations of higher profits in the future,generates an NOL in the current year,how would you recommend the corporation apply the loss?

Peter transfers an office building into a new corporation in exchange for 100 percent of the stock.In addition,the corporation assumes the mortgage on the building.Peter will treat the debt relief as boot and have to recognize gain.

Crowley Corporation has the following income during the current year: What is the amount of the corporation's taxable income?

Indicators of possible exposure of accumulated earning tax risk would include all of the following except