Question 1

Ace Corporation incurred the following taxes for the current year:

Accepted Answer

The answer of Ace Corporation incurred the following taxes for...

Question 2

A taxpayer who prepares and sells Mexican food at several of its restaurant locations can qualify for DPAD as to the receipts only from take-out orders and home-delivery sales.

Accepted Answer

A) True 
 B)False

Question 3

How is DPAD handled in an S corporation or a partnership situation?

Accepted Answer

In the case of a pass-through entity, su

Question 4

In working with the W-2 wage limitation on DPAD, a partner can count any guaranteed payments he receives from the partnership.

Accepted Answer

A) True 
 B)False

Question 5

Jeff Corporation manufactures and sells ceramic dinnerware. The company also sells dinnerware that is purchased from unrelated foreign producers. During the 2014 tax year, Jeff had a U.S. profit of $1.2 million (QPAI) and a profit from the imported merchandise of $300,000. What is Jeff's DPAD?

Accepted Answer

A)  $36,000 
B)  $72,000 
C)  $108,000 
D)  $117,000 
E)  None of the above 
A)  $36,000 
B)  $72,000 
C)  $108,000 
D)  $117,000 
E)  None of the above

Question 6

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 7

Sweet Corporation, a new corporation, has gross receipts of $4.9 million, $6.9 million, and $8.6 million in
2012, 2013, and 2014, respectively. Is this corporation a small corporation with respect to the AMT in years 2012, 2013, 2014, and 2015?

Accepted Answer

Yes, Sweet is a small corporation in 201

Question 8

The AMT exemption amount of $40,000 phases out entirely once a corporation's average gross receipts exceeds $310,000.

Accepted Answer

A) True 
 B)False

Question 9

DPGR cannot include the cost of an embedded service that is part of in the sale of a manufactured product.

Accepted Answer

A) True 
 B)False

Question 10

The overall effect of the domestic production activities deduction is similar to a deduction.

Accepted Answer

A) True 
 B)False

Question 11

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 12

DPAD for 2014 is 9% of the greater of QPAI or TI, but not to exceed the W-2 wages limitation.

Accepted Answer

A) True 
 B)False

Question 13

Kim's sole proprietorship consists of a bakery and retail food sales. The bakery's DPGR is $700,000, but after CGS, direct expenses, and a ratable portion of indirect expenses are deducted, QPAI is $100,000. W-2 wages related to DPGR are significant. The retail food sales have a loss of $900,000. If Kim files a joint return and her modified AGI is $119,500, what is her allowable DPAD, if any, for 2014?

Accepted Answer

A)  None 
B)  $6,000 
C)  $7,170 
D)  $9,000 
E)  Some other amount 
A)  None 
B)  $6,000 
C)  $7,170 
D)  $9,000 
E)  Some other amount

Question 14

Swan Corporation has gross receipts of $3 million of which $1 million are non-DPGR. CGS identified with DPGR is $1.3 million, while overall selling and administrative expenses are $600,000. Under the simplified deduction method, determine Swan's QPAI.

Accepted Answer

$300,000. Amount of overall ex

Question 15

Jackson, Inc., has the following items related to the AMT.

Accepted Answer

The answer of Jackson, Inc., has the following items related...

Question 16

Ford Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1.28 million for 2014. The company is not a small corporation. If the regular corporate tax is $209,000, Ford's alternative minimum tax for 2014 is:

Accepted Answer

A)  $47,000. 
B)  $209,000. 
C)  $256,000. 
D)  $1,280,000. 
E)  None of the above. 
A)  $47,000. 
B)  $209,000. 
C)  $256,000. 
D)  $1,280,000. 
E)  None of the above.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Which AMT adjustment would only be negative?

Accepted Answer

A)  Passive activity losses. 
B)  AMT NOL deduction. 
C)  DPAD. 
D)  Completed contract method. 
E)  None of the above. 
A)  Passive activity losses. 
B)  AMT NOL deduction. 
C)  DPAD. 
D)  Completed contract method. 
E)  None of the above.

Question 19

Tanver Corporation, a calendar year corporation, has alternative minimum taxable income of $7 million in 2014 (before adjustment for adjusted current earnings). If Tanver's adjusted current earnings is $16 million, its tentative minimum tax for 2014 is:

Accepted Answer

A)  $310,000. 
B)  $2,750,000. 
C)  $6,750,000. 
D)  $7,000,000. 
E)  Some other amount. 
A)  $310,000. 
B)  $2,750,000. 
C)  $6,750,000. 
D)  $7,000,000. 
E)  Some other amount.

Question 20

Marker Corporation manufactures and sells birdhouses and feeders. The company also sells similar items that are imported from foreign countries. During the current year, Marker had a profit of $700,000 from its own products but a loss of $50,000 from the imported goods.
a. What is Marker's QPAI?
b. What is Marker's DPAD?

Accepted Answer

a. $700,000.
b. Even though QP

Ace Corporation incurred the following taxes for the current year:

A taxpayer who prepares and sells Mexican food at several of its restaurant locations can qualify for DPAD as to the receipts only from take-out orders and home-delivery sales.

How is DPAD handled in an S corporation or a partnership situation?

In working with the W-2 wage limitation on DPAD, a partner can count any guaranteed payments he receives from the partnership.

Jeff Corporation manufactures and sells ceramic dinnerware. The company also sells dinnerware that is purchased from unrelated foreign producers. During the 2014 tax year, Jeff had a U.S. profit of $1.2 million (QPAI) and a profit from the imported merchandise of $300,000. What is Jeff's DPAD?

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

Sweet Corporation, a new corporation, has gross receipts of $4.9 million, $6.9 million, and $8.6 million in 2012, 2013, and 2014, respectively. Is this corporation a small corporation with respect to the AMT in years 2012, 2013, 2014, and 2015?

The AMT exemption amount of $40,000 phases out entirely once a corporation's average gross receipts exceeds $310,000.

DPGR cannot include the cost of an embedded service that is part of in the sale of a manufactured product.

The overall effect of the domestic production activities deduction is similar to a deduction.

The exemption amount is phased out entirely when AMTI reaches:

DPAD for 2014 is 9% of the greater of QPAI or TI, but not to exceed the W-2 wages limitation.

Swan Corporation has gross receipts of $3 million of which $1 million are non-DPGR. CGS identified with DPGR is $1.3 million, while overall selling and administrative expenses are $600,000. Under the simplified deduction method, determine Swan's QPAI.

Jackson, Inc., has the following items related to the AMT.

Ford Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1.28 million for 2014. The company is not a small corporation. If the regular corporate tax is $209,000, Ford's alternative minimum tax for 2014 is:

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

Which AMT adjustment would only be negative?

Tanver Corporation, a calendar year corporation, has alternative minimum taxable income of $7 million in 2014 (before adjustment for adjusted current earnings). If Tanver's adjusted current earnings is $16 million, its tentative minimum tax for 2014 is:

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

Ace Corporation incurred the following taxes for the current year:

A taxpayer who prepares and sells Mexican food at several of its restaurant locations can qualify for DPAD as to the receipts only from take-out orders and home-delivery sales.

How is DPAD handled in an S corporation or a partnership situation?

In working with the W-2 wage limitation on DPAD, a partner can count any guaranteed payments he receives from the partnership.

Jeff Corporation manufactures and sells ceramic dinnerware. The company also sells dinnerware that is purchased from unrelated foreign producers. During the 2014 tax year, Jeff had a U.S. profit of $1.2 million (QPAI) and a profit from the imported merchandise of $300,000. What is Jeff's DPAD?

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

Sweet Corporation, a new corporation, has gross receipts of $4.9 million, $6.9 million, and $8.6 million in 2012, 2013, and 2014, respectively. Is this corporation a small corporation with respect to the AMT in years 2012, 2013, 2014, and 2015?

The AMT exemption amount of $40,000 phases out entirely once a corporation's average gross receipts exceeds $310,000.

DPGR cannot include the cost of an embedded service that is part of in the sale of a manufactured product.

The overall effect of the domestic production activities deduction is similar to a deduction.

The exemption amount is phased out entirely when AMTI reaches:

DPAD for 2014 is 9% of the greater of QPAI or TI, but not to exceed the W-2 wages limitation.

Swan Corporation has gross receipts of $3 million of which $1 million are non-DPGR. CGS identified with DPGR is $1.3 million, while overall selling and administrative expenses are $600,000. Under the simplified deduction method, determine Swan's QPAI.

Jackson, Inc., has the following items related to the AMT.

Ford Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1.28 million for 2014. The company is not a small corporation. If the regular corporate tax is $209,000, Ford's alternative minimum tax for 2014 is:

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

Which AMT adjustment would only be negative?

Tanver Corporation, a calendar year corporation, has alternative minimum taxable income of $7 million in 2014 (before adjustment for adjusted current earnings). If Tanver's adjusted current earnings is $16 million, its tentative minimum tax for 2014 is:

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