Question 1

Long-term capital gains are taxed under the AET and PHC taxes.

Accepted Answer

A) True 
 B)False

Question 2

NOLs are negative adjustments.

Accepted Answer

A) True 
 B)False

Question 3

The AMT NOL deduction is limited to 90%.

Accepted Answer

A) True 
 B)False

Question 4

Tax-exempt interest on state and local private activity bonds (issued in 2010) is a tax preference item.

Accepted Answer

A) True 
 B)False

Question 5

The exemption amount is phased out entirely when AMTI reaches:

Accepted Answer

A)  $40,000. 
B)  $310,000. 
C)  $1,000,000. 
D)  $5,000,000. 
E)  Some other amount. 
A)  $40,000. 
B)  $310,000. 
C)  $1,000,000. 
D)  $5,000,000. 
E)  Some other amount.

Question 6

Netting refers to the process of AMT adjustments reversing themselves and then being deducted from taxable income to arrive at AMTI.

Accepted Answer

A) True 
 B)False

Question 7

ATI = Taxable Income - Adjustments - Dividends paid - Accumulated earnings credit.

Accepted Answer

A) True 
 B)False

Question 8

For purposes of the DPAD wage limitation, amounts paid to independent contractors can be considered.

Accepted Answer

A) True 
 B)False

Question 9

A small corporation with unused minimum tax credits may use what percentage of regular tax as a minimum credit in 2011?

Accepted Answer

A)  0. 
B)  25%. 
C)  50%. 
D)  75%. 
E)  None of the above. 
A)  0. 
B)  25%. 
C)  50%. 
D)  75%. 
E)  None of the above.

Question 10

In the case of an individual, modified AGI is substituted for QPAI in the DPAD formula.

Accepted Answer

A) True 
 B)False

Question 11

The regular foreign tax credit is available to reduce AMT liability.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following has no effect in arriving at ACE?

Accepted Answer

A)  Tax-exempt income (net of expenses). 
B)  Excess charitable contributions. 
C)  Key employee insurance proceeds. 
D)  Deferred gain on installment sales. 
E)  Premiums paid on key employee insurance. 
A)  Tax-exempt income (net of expenses). 
B)  Excess charitable contributions. 
C)  Key employee insurance proceeds. 
D)  Deferred gain on installment sales. 
E)  Premiums paid on key employee insurance.

Question 13

Ford Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1.28 million for 2011. The company is not a small corporation. If the regular corporate tax is $211,050, Ford's alternative minimum tax for 2011 is:

Accepted Answer

A)  $44,950. 
B)  $209,000. 
C)  $256,000. 
D)  $1,280,000. 
E)  None of the above. 
A)  $44,950. 
B)  $209,000. 
C)  $256,000. 
D)  $1,280,000. 
E)  None of the above.

Question 14

Which, if any, of the following is a characteristic of the DPAD?

Accepted Answer

A)  Not applicable in situations involving S corporations. 
B)  Applicable only to manufactured goods that are exported from the U.S. 
C)  Can never apply when the rendition of personal services is involved. 
D)  Can sometimes apply when some of the components of a product are manufactured in foreign countries. 
E)  None of the above. 
A)  Not applicable in situations involving S corporations. 
B)  Applicable only to manufactured goods that are exported from the U.S. 
C)  Can never apply when the rendition of personal services is involved. 
D)  Can sometimes apply when some of the components of a product are manufactured in foreign countries. 
E)  None of the above.

Question 15

Stacey, an advertising executive, pays a contractor to build a lodge on property she owns in Colorado. If Stacey sells the lodge, the proceeds (less the cost of the land) will be DPGR.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is always personal holding company income?

Accepted Answer

A)  Gas royalties. 
B)  Rent income. 
C)  Dividends 
D)  Personal service contract income. 
E)  All of the above. 
A)  Gas royalties. 
B)  Rent income. 
C)  Dividends 
D)  Personal service contract income. 
E)  All of the above.

Question 17

What is personal holding company income?

Accepted Answer

PHCI consists of passive types of income

Question 18

The DPAD is limited by 50% of the total W-2 wages paid by a taxpayer.

Accepted Answer

A) True 
 B)False

Question 19

The DPAD is not allowed for AMT purposes.

Accepted Answer

A) True 
 B)False

Question 20

Which formula is correct for DPAD?

Accepted Answer

A)  Smaller of 9% of QPAI or 9% of modified AGI, not to exceed 50% of allocable wages. 
B)  Larger of 9% of QPAI or 9% of taxable income, not to exceed 50% of allocable wages. 
C)  Smaller of 9% of QPAI or 9% of taxable income, not to exceed 60% of allocable wages. 
D)  Larger of 9% of QPAI or 9% of alternative minimum tax, not to exceed 60% of allocable wages. 
E)  None of the above. 
A)  Smaller of 9% of QPAI or 9% of modified AGI, not to exceed 50% of allocable wages. 
B)  Larger of 9% of QPAI or 9% of taxable income, not to exceed 50% of allocable wages. 
C)  Smaller of 9% of QPAI or 9% of taxable income, not to exceed 60% of allocable wages. 
D)  Larger of 9% of QPAI or 9% of alternative minimum tax, not to exceed 60% of allocable wages. 
E)  None of the above.

Long-term capital gains are taxed under the AET and PHC taxes.

NOLs are negative adjustments.

The AMT NOL deduction is limited to 90%.

Tax-exempt interest on state and local private activity bonds (issued in 2010) is a tax preference item.

The exemption amount is phased out entirely when AMTI reaches:

Netting refers to the process of AMT adjustments reversing themselves and then being deducted from taxable income to arrive at AMTI.

ATI = Taxable Income - Adjustments - Dividends paid - Accumulated earnings credit.

For purposes of the DPAD wage limitation, amounts paid to independent contractors can be considered.

A small corporation with unused minimum tax credits may use what percentage of regular tax as a minimum credit in 2011?

In the case of an individual, modified AGI is substituted for QPAI in the DPAD formula.

The regular foreign tax credit is available to reduce AMT liability.

Which of the following has no effect in arriving at ACE?

Ford Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1.28 million for 2011. The company is not a small corporation. If the regular corporate tax is $211,050, Ford's alternative minimum tax for 2011 is:

Which, if any, of the following is a characteristic of the DPAD?

Stacey, an advertising executive, pays a contractor to build a lodge on property she owns in Colorado. If Stacey sells the lodge, the proceeds (less the cost of the land) will be DPGR.

Which of the following is always personal holding company income?

What is personal holding company income?

The DPAD is limited by 50% of the total W-2 wages paid by a taxpayer.

The DPAD is not allowed for AMT purposes.

Which formula is correct for DPAD?

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Earnings 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

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 3: Corporations: Special Situations

Long-term capital gains are taxed under the AET and PHC taxes.

NOLs are negative adjustments.

The AMT NOL deduction is limited to 90%.

Tax-exempt interest on state and local private activity bonds (issued in 2010) is a tax preference item.

The exemption amount is phased out entirely when AMTI reaches:

Netting refers to the process of AMT adjustments reversing themselves and then being deducted from taxable income to arrive at AMTI.

ATI = Taxable Income - Adjustments - Dividends paid - Accumulated earnings credit.

For purposes of the DPAD wage limitation, amounts paid to independent contractors can be considered.

A small corporation with unused minimum tax credits may use what percentage of regular tax as a minimum credit in 2011?

In the case of an individual, modified AGI is substituted for QPAI in the DPAD formula.

The regular foreign tax credit is available to reduce AMT liability.

Which of the following has no effect in arriving at ACE?

Ford Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1.28 million for 2011. The company is not a small corporation. If the regular corporate tax is $211,050, Ford's alternative minimum tax for 2011 is:

Which, if any, of the following is a characteristic of the DPAD?

Stacey, an advertising executive, pays a contractor to build a lodge on property she owns in Colorado. If Stacey sells the lodge, the proceeds (less the cost of the land) will be DPGR.

Which of the following is always personal holding company income?

What is personal holding company income?

The DPAD is limited by 50% of the total W-2 wages paid by a taxpayer.

The DPAD is not allowed for AMT purposes.

Which formula is correct for DPAD?

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Earnings 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

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters