Exam 5: Other Corporate Tax Levies

Becky places five-year property in service during June 2014 using the half-year convention.Depreciation is $1,500 under the 150% declining balance method and $2,000 under 200% declining balance.Becky uses the 150% declining balance method for regular income tax purposes.What is the amount of Becky's AMT adjustment?

Which of the following statements regarding the minimum tax credit is correct?

Which of the following actions cannot be used to eliminate a possible personal holding company tax liability involving a corporation owned by a mother and a father?

In determining accumulated taxable income for the purpose of the accumulated earnings tax,which one of the following is allowed as a deduction?

The accumulated earnings tax does not apply to corporations that

All of the following are recognized as reasons for accumulating earnings except

Lawrence Corporation reports the following results during the current year: No dividends were paid in the throwback period.A long-term capital gain of $50,000 is included in taxable income.The statutory accumulated earnings tax exemption has been used up in prior years.An additional earnings accumulation of $60,000 for the current year can be justified as meeting the reasonable needs of the business.What is Lawrence Corporation's accumulated earnings tax liability?

Arnold Corporation reports taxable income of $250,000,tax preference items of $20,000,and positive AMT adjustments of $20,000.What is its statutory exemption,when computing alternative minimum taxable income?

ASC 740 requires that

All corporations,except S corporations and small C corporations,must calculate the ACE adjustment.

Drury Corporation,which was organized three years ago,reports the following adjusted current earnings (ACE)and preadjustment alternative minimum taxable income (AMTI)amounts. What is the ACE adjustment to increase (or decrease)taxable income to arrive at AMTI for the current year?

Rich Company sold equipment this year for $50,000.The equipment had been depreciated using 200% declining balance.Accumulated depreciation totals $60,000 for regular tax purposes and $70,000 for AMTI.The equipment originally cost $90,000.What AMT issues does this sale present?

Which of the following entities is subject to the accumulated earnings tax?

A personal holding company cannot take a dividends-paid deduction for

To avoid the accumulated earnings tax,a corporation needs to have a definite plan for expending the accumulated earnings.

Flower Corporation,a C corporation but not a personal service corporation,has taxable income of $200,000 plus $125,000 of positive adjustments plus $150,000 of tax preferences.Its regular tax liability is $68,000.Calculate Flower Corporation's minimum tax credit.

The personal holding company tax

What are the four general rules that provide a framework for the ACE calculation?

Which of the following is not an adjustment to taxable income when computing the personal holding company tax?

Barker Corporation,a personal service company,has $200,000 of taxable income.Barker has tax preferences and positive adjustments of $200,000 and negative adjustments of $140,000 for alternative minimum tax purposes.No credits are available.Barker's regular tax liability is $70,000.What is the tentative minimum tax amount?