Question 1

A taxpayer wishing to reduce the negative tax effects of the application of the unitary theory might:

Accepted Answer

A) Affiliate with a service division that shows an operating loss, like one in research and development. 
B) Acquire a unitary affiliate in a country with a high wage structure. 
C) Add a profitable entity to the unitary group. 
D) a.and b. 
A) Affiliate with a service division that shows an operating loss, like one in research and development. 
B) Acquire a unitary affiliate in a country with a high wage structure. 
C) Add a profitable entity to the unitary group. 
D) a.and b.

Question 2

The individual seller of a used auto should collect and remit sales tax to the state.

Accepted Answer

A) True 
 B)False

Question 3

A few states assess a state-level tax on an S corporation that operates in the state.

Accepted Answer

A) True 
 B)False

Question 4

Bert Corporation, a calendar-year taxpayer, owns property in States M and O.Both M and O require that the average value of assets be included in the property factor.M requires that the property be valued at its historical cost, and O requires that the property be included in the property factor at its net depreciated book value.     Bert's M property factor is:

Accepted Answer

A) 75.0%. 
B) 66.7%. 
C) 64.9%. 
D) 64.5%. 
A) 75.0%. 
B) 66.7%. 
C) 64.9%. 
D) 64.5%.

Question 5

All of the U.S.states have adopted a tax based on net taxable income.

Accepted Answer

A) True 
 B)False

Question 6

S corporations flow-through income amounts to its shareholders, and most states require a withholding of shareholder taxes on the allocated amounts.

Accepted Answer

A) True 
 B)False

Question 7

In unitary states, a(n) ____________________ provision permits a multinational corporation to elect to limit the reach of the state's taxing jurisdiction to activities occurring within the boundaries of the United States.

Accepted Answer

The answer of In unitary states, a(n) ____________________ provision permits...

Question 8

Norman Corporation owns and operates two manufacturing facilities, one in State X and the other in State Y.Due to a temporary decline in the corporation's sales, Norman has rented 20% of its Y facility to an unaffiliated corporation.Norman generated $1,000,000 net rental income and $2,000,000 income from manufacturing. Norman is incorporated in Y. For X and Y purposes, rental income is classified as allocable nonbusiness income.By applying the statutes of each state, Norman determined that its apportionment factors are .65 for X and .35 for Y.
Norman's income attributed to X is:

Accepted Answer

A) $0. 
B) $1,000,000. 
C) $1,300,000. 
D) $2,000,000. 
E) $3,000,000. 
A) $0. 
B) $1,000,000. 
C) $1,300,000. 
D) $2,000,000. 
E) $3,000,000.

Question 9

Match each of the following events to its likely effect on WillCo's various apportionment factors. WillCo is based in Q and has customers in Q, R, and S. To this point, WillCo has not established nexus with S.More than one choice may be correct.

Accepted Answer

The answer of Match each of the following events to...

Question 10

Typically, the state's payroll factor ____________________ (does/does not) include the fringe benefits provided to its sales force.

Accepted Answer

The answer of Typically, the state's payroll factor ____________________ (does/does...

Question 11

You are preparing to make a presentation to a client who has some familiarity with state income tax rules. At a general level, list for the client the principles of multistate tax planning.

Accepted Answer

· State and local tax planning often inv

Question 12

Almost all of the states assess some form of consumer-level sales/use tax.

Accepted Answer

A) True 
 B)False

Question 13

The property factor includes land and buildings used for business purposes.

Accepted Answer

A) True 
 B)False

Question 14

José Corporation realized $600,000 taxable income from the sales of its products in States X and Z.José's activities in both states establish nexus for income tax purposes.José's sales, payroll, and property among the states include the following.   X utilizes an equally weighted three-factor apportionment formula.How much of José's taxable income is apportioned to X?

Accepted Answer

A) $79,800. 
B) $300,000. 
C) $520,200. 
D) $600,000. 
A) $79,800. 
B) $300,000. 
C) $520,200. 
D) $600,000.

Question 15

The typical state sales/use tax falls on sales of both real and personal property.

Accepted Answer

A) True 
 B)False

Question 16

Most states begin the computation of taxable income with an amount from the Federal income tax return.

Accepted Answer

A) True 
 B)False

Question 17

Judy, a regional sales manager, has her office in State X.Her region includes several states, as indicated in the sales report below.Determine how much of Judy's $200,000 compensation is assigned to the payroll factor of State X.

Accepted Answer

A) $0. 
B) $66,667. 
C) $80,000. 
D) $200,000. 
A) $0. 
B) $66,667. 
C) $80,000. 
D) $200,000.

Question 18

List which items are included in the payroll factor of a state. Consider all forms of compensation that an employee might receive. Apply the general UDITPA rules.

Accepted Answer

The following items,

Question 19

Bulky Company sold an asset on the first day of the tax year for $500,000.Bulky's Federal tax basis for the asset was $300,000.Because of differences in cost recovery schedules, the state regular-tax basis in the asset was $375,000.What adjustment, if any, should be made to Bulky's Federal taxable income in determining the correct taxable income for the typical state?

Accepted Answer

A) $75,000. 
B) $25,000. 
C) ($75,000). 
D) $0. 
A) $75,000. 
B) $25,000. 
C) ($75,000). 
D) $0.

Question 20

Troy, an S corporation, is subject to tax only in State
A. On Schedule K of its Federal Form 1120S, Troy reported ordinary income of $2,000,000 from its business, municipal bond interest of $150,000, taxable interest of $150,000, and charitable contributions of $300,000.A does not recognize S status, but it does follow the Federal provisions with respect to the determination of taxable income for a corporation.Determine Troy's A taxable income.

Accepted Answer

Since A does not recognize S c

Exam 24: Multistate Corporate Taxation

A taxpayer wishing to reduce the negative tax effects of the application of the unitary theory might:

The individual seller of a used auto should collect and remit sales tax to the state.

A few states assess a state-level tax on an S corporation that operates in the state.

All of the U.S.states have adopted a tax based on net taxable income.

S corporations flow-through income amounts to its shareholders, and most states require a withholding of shareholder taxes on the allocated amounts.

In unitary states, a(n) ____________________ provision permits a multinational corporation to elect to limit the reach of the state's taxing jurisdiction to activities occurring within the boundaries of the United States.

Match each of the following events to its likely effect on WillCo's various apportionment factors. WillCo is based in Q and has customers in Q, R, and S. To this point, WillCo has not established nexus with S.More than one choice may be correct.

Typically, the state's payroll factor ____________________ (does/does not) include the fringe benefits provided to its sales force.

You are preparing to make a presentation to a client who has some familiarity with state income tax rules. At a general level, list for the client the principles of multistate tax planning.

Almost all of the states assess some form of consumer-level sales/use tax.

The property factor includes land and buildings used for business purposes.

The typical state sales/use tax falls on sales of both real and personal property.

Most states begin the computation of taxable income with an amount from the Federal income tax return.

Judy, a regional sales manager, has her office in State X.Her region includes several states, as indicated in the sales report below.Determine how much of Judy's $200,000 compensation is assigned to the payroll factor of State X.

List which items are included in the payroll factor of a state. Consider all forms of compensation that an employee might receive. Apply the general UDITPA rules.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 1

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 2

Property Transactions: Capital Gains and Losses, 1231, Recapture Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S: Corporations

Exempt Entities

Taxation of International Transactions

Tax Practice and Ethics

Income Taxation of Trusts and Estates

Filters