Question 1

Which of the following items are tax preference items for purposes of arriving at alternative minimum taxable income?

Accepted Answer

A) excess intangible drilling costs on oil and gas properties 
B) interest income earned on federal obligations 
C) all depreciation claimed on pre-1987 real property acquisitions 
D) excess of net long-term capital gains over short-term capital losses 
A) excess intangible drilling costs on oil and gas properties 
B) interest income earned on federal obligations 
C) all depreciation claimed on pre-1987 real property acquisitions 
D) excess of net long-term capital gains over short-term capital losses

Question 2

Identify which of the following statements is true.

Accepted Answer

A) The personal holding company tax is levied to prevent closely held corporations from sheltering passive income. 
B) Caleb Corporation is owned by a mother and her two daughters.It reports $100,000 of rental income,$30,000 of depreciation,interest,and property taxes on the rental real estate,and $10,000 of dividend income.Caleb Corporation is classified as a personal holding company. 
C) Luke Corporation is owned by a father and his son.The corporation employs 10 individuals to provide public accounting services.Father and son make all of the work assignments for the professional employees.The professional fees earned by the corporation are personal holding company income. 
D) All of the above are false. 
A) The personal holding company tax is levied to prevent closely held corporations from sheltering passive income. 
B) Caleb Corporation is owned by a mother and her two daughters.It reports $100,000 of rental income,$30,000 of depreciation,interest,and property taxes on the rental real estate,and $10,000 of dividend income.Caleb Corporation is classified as a personal holding company. 
C) Luke Corporation is owned by a father and his son.The corporation employs 10 individuals to provide public accounting services.Father and son make all of the work assignments for the professional employees.The professional fees earned by the corporation are personal holding company income. 
D) All of the above are false.

Question 3

What is the effect of the two-pronged test that allows the exclusion from PHCI of certain AIR (adjusted income from rents)?

Accepted Answer

The effect of the two-pronged test is th

Question 4

A corporation can be subject to both the accumulated earnings tax and the personal holding company tax in the same year.

Accepted Answer

A) True 
 B)False

Question 5

The following information is reported by Acme Corporation.   
What is Acme Corporation's average operating cycle as a percentage of the year?

Accepted Answer

The answer of The following information is reported by Acme...

Question 6

Identify which of the following statements is false.

Accepted Answer

A) The 80% dividends-received deduction can be claimed when computing a corporation's undistributed personal holding company income (UPHCI). 
B) Rental expenses in excess of rental income are added back to taxable income to arrive at personal holding company income (PHCI). 
C) Wind Corporation is a personal holding company.Its taxable income for this year is $100,000.The corporation's charitable contributions are $5,000 greater than its income tax charitable contribution deduction limitation.Wind's UPHCI is $95,000,assuming no other adjustments must be made. 
D) The PHC tax is assessed at 20%. 
A) The 80% dividends-received deduction can be claimed when computing a corporation's undistributed personal holding company income (UPHCI). 
B) Rental expenses in excess of rental income are added back to taxable income to arrive at personal holding company income (PHCI). 
C) Wind Corporation is a personal holding company.Its taxable income for this year is $100,000.The corporation's charitable contributions are $5,000 greater than its income tax charitable contribution deduction limitation.Wind's UPHCI is $95,000,assuming no other adjustments must be made. 
D) The PHC tax is assessed at 20%.

Question 7

What is a personal holding company?

Accepted Answer

A personal holding company is any corpor

Question 8

A manufacturing corporation has accumulated E&P of $210,000 and current E&P of $65,000.Accumulated taxable income,before reduction for the accumulated earnings credit,is $90,000 for the current year.No dividends were paid during the year.The corporation has an increase in reasonable business needs of $35,000.If the corporation is not a service corporation and has reported no long-term capital gains,what is the amount of earnings subject to the accumulated earnings tax?

Accepted Answer

$90,000 - $40,000 ac

Question 9

In the current year,Sun Corporation's federal income taxes before credits are $220,000.Its TMT is $100,000.Their only available credit is a research credit (part of the general business credit)of $160,000.The general business credit is limited to what amount?

Accepted Answer

The lesser of: (a)$160,000 tentative gen

Question 10

Mullins Corporation is classified as a PHC for the current year,reporting $263,000 of taxable income on its federal income tax return:   
Actual charitable contributions made by Mullins Corporation were $75,000.What are the federal income tax due and the personal holding company (PHC)tax liability? Discuss the methods (if any)by which payment of the PHC tax can be avoided.

Accepted Answer

The federal income tax liabili

Question 11

Hydrangia Corporation reports the following results for the current year:   
What is Hydrangia Corporation's alternative minimum tax liability?

Accepted Answer

The answer of Hydrangia Corporation reports the following results for...

Question 12

Identify which of the following statements is true.

Accepted Answer

A) The Bardahl formula is based on the firm's inventory period,receivables period,credit period,and total cash expenditures for cost of sales and operating expenses. 
B) The Bardahl formula uses the concept of working capital,cash over current liabilities. 
C) The Bardahl formula provides mathematical exactness when calculating reasonable working capital needs for accumulated earnings tax purposes. 
D) All of the above are false. 
A) The Bardahl formula is based on the firm's inventory period,receivables period,credit period,and total cash expenditures for cost of sales and operating expenses. 
B) The Bardahl formula uses the concept of working capital,cash over current liabilities. 
C) The Bardahl formula provides mathematical exactness when calculating reasonable working capital needs for accumulated earnings tax purposes. 
D) All of the above are false.

Question 13

Khuns Corporation,a personal holding company,reports the following:   
Calculate Khuns Corporation's adjusted income from rents (AIR).

Accepted Answer

The answer of Khuns Corporation,a personal holding company,reports the following:...

Question 14

Identify which of the following statements is true.

Accepted Answer

A) Depreciation on real property may be a tax preference item for purposes of computing AMT. 
B) Depreciation on real property may be an adjustment item for purposes of computing AMT. 
C) Adjustments to taxable income always increase alternative minimum taxable income. 
D) Both A and B are true. 
A) Depreciation on real property may be a tax preference item for purposes of computing AMT. 
B) Depreciation on real property may be an adjustment item for purposes of computing AMT. 
C) Adjustments to taxable income always increase alternative minimum taxable income. 
D) Both A and B are true.

Question 15

Identify which of the following statements is true.

Accepted Answer

A) A deficiency dividend is included in the shareholder's gross income for his/her tax year that includes the last day of the tax year in which the personal holding company claims a dividends-paid deduction. 
B) A shareholder who receives a deficiency dividend must report the dividend as gross income for the tax year that includes the last day of the distributing corporation's tax year on which it was a PHC. 
C) A personal holding company's payment of a deficiency dividend eliminates its need to pay the personal holding company tax as well as any interest and underpayment penalties on the tax deficiency. 
D) All of the above are false. 
A) A deficiency dividend is included in the shareholder's gross income for his/her tax year that includes the last day of the tax year in which the personal holding company claims a dividends-paid deduction. 
B) A shareholder who receives a deficiency dividend must report the dividend as gross income for the tax year that includes the last day of the distributing corporation's tax year on which it was a PHC. 
C) A personal holding company's payment of a deficiency dividend eliminates its need to pay the personal holding company tax as well as any interest and underpayment penalties on the tax deficiency. 
D) All of the above are false.

Question 16

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 second previous year?

Accepted Answer

$3,000 - $

Question 17

Identify which of the following statements is false.

Accepted Answer

A) Adjusted current earnings (AC
E) is the same as E&P. 
B) A corporation's positive adjusted current earnings (AC
E) adjustment equals 75% of the excess of its ACE over its preadjustment AMTI (AMTI before this adjustment and the alternative tax NOL deduction). 
C) A corporation's negative adjusted current earnings (AC
E) adjustment equals 75% of the excess of its preadjustment AMTI (AMTI before this adjustment and the alternative tax NOL deduction)over its ACE,but may not exceed the cumulative "net" ACE adjustment amounts from all post-1989 tax years. 
D) The ACE adjustment is not required of S corporations. 
A) Adjusted current earnings (AC
E) is the same as E&P. 
B) A corporation's positive adjusted current earnings (AC
E) adjustment equals 75% of the excess of its ACE over its preadjustment AMTI (AMTI before this adjustment and the alternative tax NOL deduction). 
C) A corporation's negative adjusted current earnings (AC
E) adjustment equals 75% of the excess of its preadjustment AMTI (AMTI before this adjustment and the alternative tax NOL deduction)over its ACE,but may not exceed the cumulative "net" ACE adjustment amounts from all post-1989 tax years. 
D) The ACE adjustment is not required of S corporations.

Question 18

Certain adjustments must be made to alternative minimum taxable income (AMTI)to arrive at adjusted current earnings (ACE).Which one of the following adjustments increases AMTI to arrive at ACE?

Accepted Answer

A) federal income taxes paid 
B) the 80% dividends-received deduction 
C) gain realized on the installment sale of noninventory property 
D) excess of capital losses over capital gains 
A) federal income taxes paid 
B) the 80% dividends-received deduction 
C) gain realized on the installment sale of noninventory property 
D) excess of capital losses over capital gains

Question 19

Life insurance proceeds are a positive adjustment for adjusted current earnings (ACE),but not alternative minimum taxable income (AMTI).

Accepted Answer

A) True 
 B)False

Question 20

Identify which of the following statements is true.

Accepted Answer

A) The minimum tax credit carries forward indefinitely and offsets regular tax liabilities in future years. 
B) The minimum tax credit available for a corporation's alternative minimum tax liability can be carried over for five years. 
C) The general business credit is permitted to offset 100% of the larger of (1)a corporation's regular tax amount,or (2)its tentative minimum tax amount. 
D) All of the above are false. 
A) The minimum tax credit carries forward indefinitely and offsets regular tax liabilities in future years. 
B) The minimum tax credit available for a corporation's alternative minimum tax liability can be carried over for five years. 
C) The general business credit is permitted to offset 100% of the larger of (1)a corporation's regular tax amount,or (2)its tentative minimum tax amount. 
D) All of the above are false.

Which of the following items are tax preference items for purposes of arriving at alternative minimum taxable income?

Identify which of the following statements is true.

What is the effect of the two-pronged test that allows the exclusion from PHCI of certain AIR (adjusted income from rents)?

A corporation can be subject to both the accumulated earnings tax and the personal holding company tax in the same year.

The following information is reported by Acme Corporation. What is Acme Corporation's average operating cycle as a percentage of the year?

Identify which of the following statements is false.

What is a personal holding company?

In the current year,Sun Corporation's federal income taxes before credits are $220,000.Its TMT is $100,000.Their only available credit is a research credit (part of the general business credit)of $160,000.The general business credit is limited to what amount?

Hydrangia Corporation reports the following results for the current year: What is Hydrangia Corporation's alternative minimum tax liability?

Identify which of the following statements is true.

Khuns Corporation,a personal holding company,reports the following: Calculate Khuns Corporation's adjusted income from rents (AIR).

Identify which of the following statements is true.

Identify which of the following statements is true.

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 second previous year?

Identify which of the following statements is false.

Certain adjustments must be made to alternative minimum taxable income (AMTI)to arrive at adjusted current earnings (ACE).Which one of the following adjustments increases AMTI to arrive at ACE?

Life insurance proceeds are a positive adjustment for adjusted current earnings (ACE),but not alternative minimum taxable income (AMTI).

Identify which of the following statements is true.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

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Exam 5: Other Corporate Tax Levies

Which of the following items are tax preference items for purposes of arriving at alternative minimum taxable income?

Identify which of the following statements is true.

What is the effect of the two-pronged test that allows the exclusion from PHCI of certain AIR (adjusted income from rents)?

A corporation can be subject to both the accumulated earnings tax and the personal holding company tax in the same year.

The following information is reported by Acme Corporation. What is Acme Corporation's average operating cycle as a percentage of the year?

Identify which of the following statements is false.

What is a personal holding company?

In the current year,Sun Corporation's federal income taxes before credits are $220,000.Its TMT is $100,000.Their only available credit is a research credit (part of the general business credit)of $160,000.The general business credit is limited to what amount?

Hydrangia Corporation reports the following results for the current year: What is Hydrangia Corporation's alternative minimum tax liability?

Identify which of the following statements is true.

Khuns Corporation,a personal holding company,reports the following: Calculate Khuns Corporation's adjusted income from rents (AIR).

Identify which of the following statements is true.

Identify which of the following statements is true.

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 second previous year?

Identify which of the following statements is false.

Certain adjustments must be made to alternative minimum taxable income (AMTI)to arrive at adjusted current earnings (ACE).Which one of the following adjustments increases AMTI to arrive at ACE?

Life insurance proceeds are a positive adjustment for adjusted current earnings (ACE),but not alternative minimum taxable income (AMTI).

Identify which of the following statements is true.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters