Exam 11: The Corporate Income Tax

In the current year, Parvifolia, Inc. had $400,000 of revenue from operations and $160,000 of dividends from non-affiliated 15 percent-owned domestic corporations. The corporation's deductible operating expenses totaled $410,000. What is Parvifolia, Inc.'s dividends received deduction for the current year?

Terry forms the Camphor Corporation during the current year. She transfers property with a value of $700,000 to Camphor Corporation in exchange for 100 percent of the stock in the corporation. Terry's basis in the property transferred was $400,000 and the corporation assumed a $275,000 mortgage on the property. If the fair market value of the stock received by Terry is $450,000, what is the corporation's basis in the property received from Terry?

During the current year, The Jupiter Company, which is an S corporation, had the following items of income and expenses: ​ a.Calculate the net ordinary income. b.List all the other items which must be separately reported. c.If the S corporation is on a calendar year, when is the corporation's tax return due?

Which of the following is not a requirement for qualification as an S corporation?

What is the purpose of Schedule M-1?

For the current year, the Beech Corporation has net income on its books of $60,000, including the following items: Federal tax depreciation exceeds the depreciation deducted on the books by $5,000. What is the corporation's taxable income?

Corporations may be subject to the alternative minimum tax.

Which of the following is false in regards to filing requirements?

Harry forms the Nectarine Corporation during the current tax year. To form the corporation, Harry transfers assets having a fair market value of $650,000 to Nectarine Corporation for 100 percent of the corporation's stock. Harry's adjusted basis in the assets transferred was $375,000 and Nectarine Corporation assumed a $200,000 mortgage on the assets. If the fair market value of the stock received by Harry is $450,000, what is his basis in the stock received from the corporation?

Capital losses of a corporation must be used to offset capital gains and net capital losses may not be deducted from the ordinary income of a corporation.

For 2016, what is the maximum tax rate for personal service corporations?

Corporations may deduct without limitation any amount of charitable contributions providing the amounts are paid to qualified organizations.

XYZ Corporation has a December 31 year-end. ​ a.When is XYZ Corporation's tax return due? b.When does XYZ Corporation need to make its estimated tax payments? c.Assuming that XYZ Corporation owes $5,000 on the original tax return due date and it files for an extension and is granted an automatic extension to file tax returns, what is the extended tax return date and when should taxes be paid?

The accumulated earnings tax will not be imposed on accumulations that can be shown to be necessary to meet the reasonable needs of the business.

In general, estimated payments for calendar-year corporations are due on:

Corporations are granted favorable tax treatment for short-term capital losses.

A corporation owning 80 percent or more of the stock of another corporation has a dividends received deduction of 100 percent.

For the year ended December 31, 2016, Prunus, Inc., reported net income before federal income tax expense of $800,000 per the corporation's books. This figure included the following items: What is the taxable income of Prunus, Inc. for 2016?

Ashwood Corporation has been in business for 20 years. For the previous 3 years, Ashwood Corporation had annual gross receipts of $3.3 million, $4.2 million and $5.4 million, respectively. For alternative minimum tax purposes, is Ashwood Corporation a small corporation? Give your reasoning and/or the calculation that you based your answer on. Also, why does it matter if they are a small corporation?

Which of the following is true with respect to capital gains and losses of a corporation?