Question 1

The penalty taxes of § 531 and § 541 apply to S corporations as well as C corporations.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements does not reflect the rules regarding pass-through entities and DPAD?

Accepted Answer

A) Since the deduction is determined at the owner level,each owner must make the computation separately. 
B) The entity allocates to each owner his or her share of any QPAI. 
C) In the case of partnerships,guaranteed payments are regarded as W-2 wages. 
D) A partner cannot be allocated any W-2 wages if the share of QPAI is zero. 
E) None of the above. 
A) Since the deduction is determined at the owner level,each owner must make the computation separately. 
B) The entity allocates to each owner his or her share of any QPAI. 
C) In the case of partnerships,guaranteed payments are regarded as W-2 wages. 
D) A partner cannot be allocated any W-2 wages if the share of QPAI is zero. 
E) None of the above.

Question 3

Passive activity losses of certain closely held corporations and personal service corporations are tax preferences.

Accepted Answer

A) True 
 B)False

Question 4

Tanver Corporation,a calendar year corporation,has alternative minimum taxable income of $7 million in 2012 (before adjustment for adjusted current earnings).If Tanver's adjusted current earnings is $16 million,its tentative minimum tax for 2012 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 5

Politz Corporation has average gross receipts of $4.7 million,$4.6 million,and $6.2 million in 2009,2010,and 2011,respectively.In 2012,Politz is:

Accepted Answer

A) Not subject to the corporate income tax. 
B) A small corporation with respect to the AMT. 
C) Subject to the AMT. 
D) Not a small corporation with respect to the AMT. 
E) None of the above. 
A) Not subject to the corporate income tax. 
B) A small corporation with respect to the AMT. 
C) Subject to the AMT. 
D) Not a small corporation with respect to the AMT. 
E) None of the above.

Question 6

Cave Corporation,a calendar year taxpayer,has a beginning balance in accumulated E & P of $3.5 million and current earnings of $1 million.If Cave can justify accumulations for the needs of the business of $3.7 million,its accumulated earnings credit for ATI purposes is:

Accepted Answer

A) $3.7 million. 
B) $250,000. 
C) $200,000. 
D) $0. 
E) None of the above. 
A) $3.7 million. 
B) $250,000. 
C) $200,000. 
D) $0. 
E) None of the above.

Question 7

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 8

In 2012,the DPAD reduces the corporate tax rates by about 3 percentage points.

Accepted Answer

A) True 
 B)False

Question 9

Which statement,if any,is false?

Accepted Answer

A) An S corporation is subject to the corporate AMT. 
B) A high level of investment in assets (e.g. ,equipment or structures)is a reason a company may be subject to the AMT. 
C) Many of the adjustments that apply to individuals also apply to corporations. 
D) The AMT is a separate tax system from the corporate income tax. 
E) None of the above. 
A) An S corporation is subject to the corporate AMT. 
B) A high level of investment in assets (e.g. ,equipment or structures)is a reason a company may be subject to the AMT. 
C) Many of the adjustments that apply to individuals also apply to corporations. 
D) The AMT is a separate tax system from the corporate income tax. 
E) None of the above.

Question 10

Which of the following items will be an addition to AMTI in arriving at ACE?

Accepted Answer

A) Excess capital loss. 
B) Federal income tax. 
C) Tax-exempt income. 
D) Excess charitable contributions. 
E) None of the above. 
A) Excess capital loss. 
B) Federal income tax. 
C) Tax-exempt income. 
D) Excess charitable contributions. 
E) None of the above.

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

Which of the following would not be a positive tax preference item in 2012?

Accepted Answer

A) Accelerated depreciation on real property in excess of straight-line. 
B) Intangible drilling costs. 
C) Alternative minimum tax NOL deduction. 
D) Percentage depletion in excess of adjusted basis. 
E) None of the above. 
A) Accelerated depreciation on real property in excess of straight-line. 
B) Intangible drilling costs. 
C) Alternative minimum tax NOL deduction. 
D) Percentage depletion in excess of adjusted basis. 
E) None of the above.

Question 13

How is the accumulated earnings credit calculated?

Accepted Answer

The accumulated earnings credit is the g

Question 14

Sweet Corporation,a new corporation,has gross receipts of $4.9 million,$6.9 million,and $8.6 million in 2010,2011,and 2012,respectively.Is this corporation a small corporation with respect to the AMT in years 2010,2011,2012,and 2013?

Accepted Answer

Yes,Sweet is a small corporation in 2010

Question 15

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 16

Under some circumstances,the sale of prepared food at a taxpayer's retail facility can qualify as DPGR.

Accepted Answer

A) True 
 B)False

Question 17

Intangible drilling costs are a tax preference item only for integrated oil companies.

Accepted Answer

A) True 
 B)False

Question 18

Which statement is false?

Accepted Answer

A) The stock ownership requirement for the EAG rules is 80%. 
B) Members of an EAG are treated as a single taxpayer for purposes of the DPAD. 
C) For an EAG,the DPAD is allocated among the members in proportion to each member's respective amount of QPAI. 
D) The DPAD of a consolidated group must be allocated to the group's members in proportion to each member's QPAI. 
E) None of the above is false. 
A) The stock ownership requirement for the EAG rules is 80%. 
B) Members of an EAG are treated as a single taxpayer for purposes of the DPAD. 
C) For an EAG,the DPAD is allocated among the members in proportion to each member's respective amount of QPAI. 
D) The DPAD of a consolidated group must be allocated to the group's members in proportion to each member's QPAI. 
E) None of the above is false.

Question 19

Which statement is false?

Accepted Answer

A) The starting point for computing AMTI is taxable income. 
B) A tax preference is added to taxable income. 
C) The ACE adjustment can be a negative amount. 
D) The starting point for computing ACE is taxable income. 
E) None of the above. 
A) The starting point for computing AMTI is taxable income. 
B) A tax preference is added to taxable income. 
C) The ACE adjustment can be a negative amount. 
D) The starting point for computing ACE is taxable income. 
E) None of the above.

Question 20

May Corporation,a Miami contractor,pays Crane Engineering a fee to design bridges for a highway May will build in the Cayman Islands.The fee Crane receives is DPGR.

Accepted Answer

A) True 
 B)False

The penalty taxes of § 531 and § 541 apply to S corporations as well as C corporations.

Which of the following statements does not reflect the rules regarding pass-through entities and DPAD?

Passive activity losses of certain closely held corporations and personal service corporations are tax preferences.

Tanver Corporation,a calendar year corporation,has alternative minimum taxable income of $7 million in 2012 (before adjustment for adjusted current earnings).If Tanver's adjusted current earnings is $16 million,its tentative minimum tax for 2012 is:

Politz Corporation has average gross receipts of $4.7 million,$4.6 million,and $6.2 million in 2009,2010,and 2011,respectively.In 2012,Politz is:

Cave Corporation,a calendar year taxpayer,has a beginning balance in accumulated E & P of $3.5 million and current earnings of $1 million.If Cave can justify accumulations for the needs of the business of $3.7 million,its accumulated earnings credit for ATI purposes is:

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

In 2012,the DPAD reduces the corporate tax rates by about 3 percentage points.

Which statement,if any,is false?

Which of the following items will be an addition to AMTI in arriving at ACE?

The exemption amount is phased out entirely when AMTI reaches:

Which of the following would not be a positive tax preference item in 2012?

How is the accumulated earnings credit calculated?

Sweet Corporation,a new corporation,has gross receipts of $4.9 million,$6.9 million,and $8.6 million in 2010,2011,and 2012,respectively.Is this corporation a small corporation with respect to the AMT in years 2010,2011,2012,and 2013?

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

Under some circumstances,the sale of prepared food at a taxpayer's retail facility can qualify as DPGR.

Intangible drilling costs are a tax preference item only for integrated oil companies.

Which statement is false?

Which statement is false?

May Corporation,a Miami contractor,pays Crane Engineering a fee to design bridges for a highway May will build in the Cayman Islands.The fee Crane receives is DPGR.

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

The penalty taxes of § 531 and § 541 apply to S corporations as well as C corporations.

Which of the following statements does not reflect the rules regarding pass-through entities and DPAD?

Passive activity losses of certain closely held corporations and personal service corporations are tax preferences.

Tanver Corporation,a calendar year corporation,has alternative minimum taxable income of $7 million in 2012 (before adjustment for adjusted current earnings).If Tanver's adjusted current earnings is $16 million,its tentative minimum tax for 2012 is:

Politz Corporation has average gross receipts of $4.7 million,$4.6 million,and $6.2 million in 2009,2010,and 2011,respectively.In 2012,Politz is:

Cave Corporation,a calendar year taxpayer,has a beginning balance in accumulated E & P of $3.5 million and current earnings of $1 million.If Cave can justify accumulations for the needs of the business of $3.7 million,its accumulated earnings credit for ATI purposes is:

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

In 2012,the DPAD reduces the corporate tax rates by about 3 percentage points.

Which statement,if any,is false?

Which of the following items will be an addition to AMTI in arriving at ACE?

The exemption amount is phased out entirely when AMTI reaches:

Which of the following would not be a positive tax preference item in 2012?

How is the accumulated earnings credit calculated?

Sweet Corporation,a new corporation,has gross receipts of $4.9 million,$6.9 million,and $8.6 million in 2010,2011,and 2012,respectively.Is this corporation a small corporation with respect to the AMT in years 2010,2011,2012,and 2013?

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

Under some circumstances,the sale of prepared food at a taxpayer's retail facility can qualify as DPGR.

Intangible drilling costs are a tax preference item only for integrated oil companies.

Which statement is false?

Which statement is false?

May Corporation,a Miami contractor,pays Crane Engineering a fee to design bridges for a highway May will build in the Cayman Islands.The fee Crane receives is DPGR.

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