Question 1

A company with a NOL carryforward for a tax year is ineligible for the DPAD if the carryforward eliminates current income.

Accepted Answer

A) True 
 B)False

Question 2

Reasonable needs for purposes of the accumulated earnings tax include loans to suppliers and customers.

Accepted Answer

A) True 
 B)False

Question 3

A small corporation with unused minimum tax credits may use what percentage of regular tax as a minimum credit in 2012?

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 4

The DPAD directly reduces earnings and profits since it is a deduction.

Accepted Answer

A) True 
 B)False

Question 5

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 6

The objective of the AMT is to force taxpayers that are more profitable than their taxable income reflects to pay additional income taxes.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Which of the following items will be a deduction from unadjusted AMTI in arriving at ACE?

Accepted Answer

A) Federal income tax. 
B) 80% dividends received deduction. 
C) Penalties and fines. 
D) Premiums paid on key employee insurance. 
E) None of the above. 
A) Federal income tax. 
B) 80% dividends received deduction. 
C) Penalties and fines. 
D) Premiums paid on key employee insurance. 
E) None of the above.

Question 9

A negative ACE adjustment is beneficial to a corporation.

Accepted Answer

A) True 
 B)False

Question 10

Hay Corporation manufactures and sells ceramic dinnerware.The company also sells dinnerware that is purchased from unrelated foreign producers.During the tax year 2012,Hay had a U.S.profit of $1.2 million (QPAI)and a profit from the imported merchandise of $200,000.What is Hay'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 11

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 12

The personal holding company tax rate in 2012 is 35%.

Accepted Answer

A) True 
 B)False

Question 13

A corporation has the following items related to the AMT.   The corporation's AMT,if any,is:

Accepted Answer

A) $0. 
B) $7,099,060. 
C) $7,269,060. 
D) $18,300,580. 
E) None of the above. 
A) $0. 
B) $7,099,060. 
C) $7,269,060. 
D) $18,300,580. 
E) None of the above.

Question 14

What are some of the differences (at least three)between the application of the AMT for individuals and corporations?

Accepted Answer

The answer of What are some of the differences (at...

Question 15

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 16

In terms of the effect of DPAD,the maximum tax savings for a corporation with $15 million of taxable income is $472,500 in 2012.

Accepted Answer

A) True 
 B)False

Question 17

Tanweer,Inc. ,manufactures and sells glassware.The company also sells dinnerware that is purchased from unrelated foreign producers.During tax year 2012,Tanweer had a U.S.profit of $1.3 million (QPAI)and a loss from the imported dinnerware of $300,000.What is Tanweer's DPAD?

Accepted Answer

A) None. 
B) $33,000. 
C) $66,000. 
D) $90,000. 
E) None of the above. 
A) None. 
B) $33,000. 
C) $66,000. 
D) $90,000. 
E) None of the above.

Question 18

Ravi Corporation,a calendar year taxpayer,has AMTI (before adjustment for adjusted current earnings)of $6 million for 2012.If Ravi Corporation's ACE is $15 million,its tentative minimum tax for 2012 is:

Accepted Answer

A) $2.02 million. 
B) $2.55 million. 
C) $3.45 million. 
D) $4.2 million. 
E) None of the above. 
A) $2.02 million. 
B) $2.55 million. 
C) $3.45 million. 
D) $4.2 million. 
E) None of the above.

Question 19

Once a small corporation for AMT purposes,always a small corporation.

Accepted Answer

A) True 
 B)False

Question 20

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

A company with a NOL carryforward for a tax year is ineligible for the DPAD if the carryforward eliminates current income.

Reasonable needs for purposes of the accumulated earnings tax include loans to suppliers and customers.

A small corporation with unused minimum tax credits may use what percentage of regular tax as a minimum credit in 2012?

The DPAD directly reduces earnings and profits since it is a deduction.

Which of the following is always personal holding company income?

The objective of the AMT is to force taxpayers that are more profitable than their taxable income reflects to pay additional income taxes.

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

Which of the following items will be a deduction from unadjusted AMTI in arriving at ACE?

A negative ACE adjustment is beneficial to a corporation.

Hay Corporation manufactures and sells ceramic dinnerware.The company also sells dinnerware that is purchased from unrelated foreign producers.During the tax year 2012,Hay had a U.S.profit of $1.2 million (QPAI)and a profit from the imported merchandise of $200,000.What is Hay's DPAD?

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

The personal holding company tax rate in 2012 is 35%.

A corporation has the following items related to the AMT. The corporation's AMT,if any,is:

What are some of the differences (at least three)between the application of the AMT for individuals and corporations?

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

In terms of the effect of DPAD,the maximum tax savings for a corporation with $15 million of taxable income is $472,500 in 2012.

Tanweer,Inc. ,manufactures and sells glassware.The company also sells dinnerware that is purchased from unrelated foreign producers.During tax year 2012,Tanweer had a U.S.profit of $1.3 million (QPAI)and a loss from the imported dinnerware of $300,000.What is Tanweer's DPAD?

Ravi Corporation,a calendar year taxpayer,has AMTI (before adjustment for adjusted current earnings)of $6 million for 2012.If Ravi Corporation's ACE is $15 million,its tentative minimum tax for 2012 is:

Once a small corporation for AMT purposes,always a small corporation.

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

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

A company with a NOL carryforward for a tax year is ineligible for the DPAD if the carryforward eliminates current income.

Reasonable needs for purposes of the accumulated earnings tax include loans to suppliers and customers.

A small corporation with unused minimum tax credits may use what percentage of regular tax as a minimum credit in 2012?

The DPAD directly reduces earnings and profits since it is a deduction.

Which of the following is always personal holding company income?

The objective of the AMT is to force taxpayers that are more profitable than their taxable income reflects to pay additional income taxes.

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

Which of the following items will be a deduction from unadjusted AMTI in arriving at ACE?

A negative ACE adjustment is beneficial to a corporation.

Hay Corporation manufactures and sells ceramic dinnerware.The company also sells dinnerware that is purchased from unrelated foreign producers.During the tax year 2012,Hay had a U.S.profit of $1.2 million (QPAI)and a profit from the imported merchandise of $200,000.What is Hay's DPAD?

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

The personal holding company tax rate in 2012 is 35%.

A corporation has the following items related to the AMT. The corporation's AMT,if any,is:

What are some of the differences (at least three)between the application of the AMT for individuals and corporations?

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

In terms of the effect of DPAD,the maximum tax savings for a corporation with $15 million of taxable income is $472,500 in 2012.

Tanweer,Inc. ,manufactures and sells glassware.The company also sells dinnerware that is purchased from unrelated foreign producers.During tax year 2012,Tanweer had a U.S.profit of $1.3 million (QPAI)and a loss from the imported dinnerware of $300,000.What is Tanweer's DPAD?

Ravi Corporation,a calendar year taxpayer,has AMTI (before adjustment for adjusted current earnings)of $6 million for 2012.If Ravi Corporation's ACE is $15 million,its tentative minimum tax for 2012 is:

Once a small corporation for AMT purposes,always a small corporation.

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

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