Question 1

In determining state taxable income,all of the following are adjustments to Federal income except:

Accepted Answer

A) Net operating loss. 
B) Federal income tax expense. 
C) Dividend income. 
D) Cost of goods sold. 
E) State income tax refunds. 
A) Net operating loss. 
B) Federal income tax expense. 
C) Dividend income. 
D) Cost of goods sold. 
E) State income tax refunds.

Question 2

An assembly worker earns a $30,000 salary and receives a fringe benefit package worth $15,000.The payroll factor assigns $45,000 for this employee.

Accepted Answer

A) True 
 B)False

Question 3

Only a few states have adopted an alternative minimum tax,similar to the Federal system.

Accepted Answer

A) True 
 B)False

Question 4

By making a water's edge election,the multinational taxpayer can limit the reach of the unitary theory to U.S.-based factors and income.

Accepted Answer

A) True 
 B)False

Question 5

Define the terms allocation and apportionment as they are used in multistate income taxation.

Accepted Answer

Generally,business income is apportioned

Question 6

Under most local property tax laws,the value of an asset is fixed after an appraisal by the taxing jurisdiction.

Accepted Answer

A) True 
 B)False

Question 7

Overall tax liabilities will ____________________ if the members of a unitary group begin to include affiliates subject to higher effective tax rates.

Accepted Answer

The answer of Overall tax liabilities will ____________________ if the...

Question 8

Trayne Corporation's sales office and manufacturing plant are located in State X.Trayne also maintains a manufacturing plant and sales office in State W.For purposes of apportionment,X defines payroll as all compensation paid to employees,including elective contributions to § 401(k)deferred compensation plans.Under the statutes of W,neither compensation paid to officers nor contributions to § 401(k)plans are included in the payroll factor.Trayne incurred the following personnel costs.
 
Trayne's payroll factor for State X is:

Accepted Answer

A) 100.00%. 
B) 80.00%. 
C) 78.95%. 
D) 71.43%. 
E) 50.00%. 
A) 100.00%. 
B) 80.00%. 
C) 78.95%. 
D) 71.43%. 
E) 50.00%.

Question 9

In most states,a limited liability company (LLC)is subject to the state income tax:

Accepted Answer

A) As though it were a C corporation. 
B) As though it were a business trust. 
C) As a flow-through entity, similar to Federal treatment. 
D) LLCs typically are exempted from state income taxation. 
A) As though it were a C corporation. 
B) As though it were a business trust. 
C) As a flow-through entity, similar to Federal treatment. 
D) LLCs typically are exempted from state income taxation.

Question 10

Although apportionment formulas vary among jurisdictions,most states use a three-factor formula.The factors are ____________________,____________________,and ____________________.

Accepted Answer

sales,prop

Question 11

Almost all of the states assess some form of consumer-level sales tax.

Accepted Answer

A) True 
 B)False

Question 12

Garcia Corporation is subject to tax in States G,H,and I.Garcia's compensation expense includes the following.
   
Officers' salaries are included in the payroll factor for G and H,but not for I.Compute Garcia's payroll factors for G,H,and I.

Accepted Answer

The answer of Garcia Corporation is subject to tax in...

Question 13

You are completing the State A income tax return for Quaint Corporation.Quaint is a limited liability company,and it operates in various states,showing the following results.
   
In A,all interest is treated as business income.A uses a sales-only apportionment factor.Assuming the following data are correct,compute Quaint's A taxable income.

Accepted Answer

LLCs allocate and apportion state taxabl

Question 14

In conducting multistate tax planning,the taxpayer should:

Accepted Answer

A) Review tax opportunities in light of their effect on the overall business. 
B) Consider additional administrative costs generated by the plan. 
C) Exploit inconsistencies among the statutes and formulas of the states. 
D) Recognize that minimizing state tax costs may not always be prudent. 
E) All of the above are true. 
A) Review tax opportunities in light of their effect on the overall business. 
B) Consider additional administrative costs generated by the plan. 
C) Exploit inconsistencies among the statutes and formulas of the states. 
D) Recognize that minimizing state tax costs may not always be prudent. 
E) All of the above are true.

Question 15

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation.
a.More than solicitation, creates nexus
b.Solicitation only, no nexus created
-Maintaining an in-state office for product repair

Accepted Answer

The answer of Match each of the following items with...

Question 16

A state cannot levy a tax on a business unless the business was incorporated in the state.

Accepted Answer

A) True 
 B)False

Question 17

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected.
a.Taxable
b.Not taxable
-Computer equipment purchased by a charity

Accepted Answer

The answer of Match each of the following items with...

Question 18

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation.
a.More than solicitation, creates nexus
b.Solicitation only, no nexus created
-Training administrative personnel

Accepted Answer

The answer of Match each of the following items with...

Question 19

Under ____________________ ____________________ ____________________,a state is prohibited from taxing a business if the only connection with the state is the solicitation of orders for sales of tangible personal property that are sent outside the state for approval or rejection and,if approved,are filled and shipped by the business from a point outside of the state.

Accepted Answer

The answer of Under ____________________ ____________________ ____________________,a state is prohibited...

Question 20

P.L.86-272 ____________________ (does/does not)create nexus when the seller owns real estate in the state.

Accepted Answer

The answer of P.L.86-272 ____________________ (does/does not)create nexus when the...

In determining state taxable income,all of the following are adjustments to Federal income except:

An assembly worker earns a $30,000 salary and receives a fringe benefit package worth $15,000.The payroll factor assigns $45,000 for this employee.

Only a few states have adopted an alternative minimum tax,similar to the Federal system.

By making a water's edge election,the multinational taxpayer can limit the reach of the unitary theory to U.S.-based factors and income.

Define the terms allocation and apportionment as they are used in multistate income taxation.

Under most local property tax laws,the value of an asset is fixed after an appraisal by the taxing jurisdiction.

Overall tax liabilities will ____________________ if the members of a unitary group begin to include affiliates subject to higher effective tax rates.

In most states,a limited liability company (LLC)is subject to the state income tax:

Although apportionment formulas vary among jurisdictions,most states use a three-factor formula.The factors are ,,and .

Almost all of the states assess some form of consumer-level sales tax.

Garcia Corporation is subject to tax in States G,H,and I.Garcia's compensation expense includes the following. Officers' salaries are included in the payroll factor for G and H,but not for I.Compute Garcia's payroll factors for G,H,and I.

In conducting multistate tax planning,the taxpayer should:

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation. a.More than solicitation, creates nexus b.Solicitation only, no nexus created -Maintaining an in-state office for product repair

A state cannot levy a tax on a business unless the business was incorporated in the state.

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected. a.Taxable b.Not taxable -Computer equipment purchased by a charity

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation. a.More than solicitation, creates nexus b.Solicitation only, no nexus created -Training administrative personnel

P.L.86-272 ____________________ (does/does not)create nexus when the seller owns real estate in the state.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, operation, and Basis

Partnerships: Distributions, transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Exempt Entities

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 15: Multistate Corporate Taxation

In determining state taxable income,all of the following are adjustments to Federal income except:

An assembly worker earns a $30,000 salary and receives a fringe benefit package worth $15,000.The payroll factor assigns $45,000 for this employee.

Only a few states have adopted an alternative minimum tax,similar to the Federal system.

By making a water's edge election,the multinational taxpayer can limit the reach of the unitary theory to U.S.-based factors and income.

Define the terms allocation and apportionment as they are used in multistate income taxation.

Under most local property tax laws,the value of an asset is fixed after an appraisal by the taxing jurisdiction.

Overall tax liabilities will ____________________ if the members of a unitary group begin to include affiliates subject to higher effective tax rates.

In most states,a limited liability company (LLC)is subject to the state income tax:

Although apportionment formulas vary among jurisdictions,most states use a three-factor formula.The factors are ____________________,____________________,and ____________________.

Almost all of the states assess some form of consumer-level sales tax.

Garcia Corporation is subject to tax in States G,H,and I.Garcia's compensation expense includes the following. Officers' salaries are included in the payroll factor for G and H,but not for I.Compute Garcia's payroll factors for G,H,and I.

In conducting multistate tax planning,the taxpayer should:

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation. a.More than solicitation, creates nexus b.Solicitation only, no nexus created -Maintaining an in-state office for product repair

A state cannot levy a tax on a business unless the business was incorporated in the state.

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected. a.Taxable b.Not taxable -Computer equipment purchased by a charity

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation. a.More than solicitation, creates nexus b.Solicitation only, no nexus created -Training administrative personnel

P.L.86-272 ____________________ (does/does not)create nexus when the seller owns real estate in the state.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, operation, and Basis

Partnerships: Distributions, transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Exempt Entities

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Although apportionment formulas vary among jurisdictions,most states use a three-factor formula.The factors are ,,and .