Exam 3: The Corporate Income Tax

If a controlling shareholder sells depreciable property to a controlled corporation and the property is depreciable by the purchaser,any gain on the sale is a 1231 gain.

A deferred tax asset indicates that a firm will realize the tax benefit of an event sometime in the future.

Dallas Corporation,not a dealer in securities,realizes taxable income of $60,000 from the operation of its business.Additionally,in the same year,Dallas realizes a long-term capital loss of $10,000 from the sale of marketable securities.If the corporation realizes no other capital gains or losses,what is the proper treatment for the $10,000 long-term capital loss on the tax return?

Identify which of the following statements is true.

For corporations,what happens to excess charitable contributions?

During the year,Soup Corporation contributes some of its inventory to a qualified charity for use in feeding the needy.The inventory has an FMV of $85,000 and an adjusted basis of $25,000.What is the amount of Soup Corporation's charitable contribution deduction for the donation of the inventory as determined without regard to the overall charitable contribution limitation?

Delux Corporation,a retail sales corporation,has a taxable income of $500,000.Delux Corporation's regular tax liability is

Chambers Corporation is a calendar year taxpayer using the accrual method of accounting.In 2011,its board of directors authorizes a $20,000 contribution to the Boy Scouts.Chambers pays the contribution on March 12,2012.What is the maximum contribution allowed in 2011? What is the maximum contribution allowed in 2012?

Bebop Corporation reports the following results in the current year: What is Bebop's taxable income?

Maxwell Corporation reports the following results: Maxwell's dividends-received deduction is

Woods and Tiger Corporations have only one class of stock outstanding,owned by the following individuals: Are Woods and Tiger members of a brother-sister controlled group? Why or why not?

If a corporation's charitable contributions exceed the deduction limitation in a particular year,the excess

You are the CPA who prepares the tax returns for Dudley,his wife Margo,and their two corporations.Dave owns 100% of Duright Corporation's stock.Duright's current-year taxable income is $100,000.Margo owns 100% of Northwest Corporation's stock.Northwest's current-year taxable income is $150,000.Dudley and Margo file a joint federal income tax return.What issues should be considered with respect to the calculation of the three tax return liabilities?

Booth Corporation sells a building classified as a residential rental property for $200,000.The MACRS straight-line depreciation taken is $20,000 and the adjusted basis of the building is $170,000.Booth Corporation must recognize ordinary income of

Identify which of the following statements is true.

Which of the following results in a deferred tax asset?

Which of the following items is a permanent difference between taxable and financial accounting income?

Which of the following is not subject to classification as a personal service corporation?

Super Corporation gives a painting to a museum for public display on August 6.The painting was purchased on April 3 of the same year for $20,000 and is worth $30,000 at the date of gift.Also,Super accrues a charitable contribution on December 30 and pays the $12,000 contribution on February 1 of the next year.Super Corporation is a calendar-year corporation that uses the accrual method of accounting.Before considering the 10% limitation rule,the maximum deduction for the current year is

Baxter Corporation is a personal service corporation.Baxter Corporation has taxable income of $10,000.Baxter Corporation's tax is