Question 1

An ad valorem property tax is based on the asset's current ____________________.

Accepted Answer

The answer of An ad valorem property tax is based...

Question 2

Mandy Corporation realized $1,000,000 taxable income from the sales of its products in States X and Z.Mandy's activities establish nexus for income tax purposes only in Z.Mandy's sales,payroll,and property among the states include the following.   X utilizes a sales-only factor in its three-factor apportionment formula.How much of Mandy's taxable income is apportioned to X?

Accepted Answer

A) $0. 
B) $333,333. 
C) $543,333. 
D) $1,000,000. 
A) $0. 
B) $333,333. 
C) $543,333. 
D) $1,000,000.

Question 3

Simpkin Corporation owns manufacturing facilities in States A,B,and C.A uses a three-factor apportionment formula under which the sales,property and payroll factors are equally weighted.B uses a three-factor apportionment formula under which sales are double-weighted.C employs a single-factor apportionment factor,based solely on sales.
Simpkin's operations generated $1,000,000 of apportionable income,and its sales and payroll activity and average property owned in each of the three states is as follows.
  Simpkin's apportionable income assigned to B is:

Accepted Answer

A) $1,000,000. 
B) $533,333. 
C) $475,000. 
D) $0. 
A) $1,000,000. 
B) $533,333. 
C) $475,000. 
D) $0.

Question 4

When a _________________________ is in effect,out-of-state sales that are not subject to tax in the destination state are pulled back into the sales factor numerator of the origination state.

Accepted Answer

The answer of When a _________________________ is in effect,out-of-state sales...

Question 5

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

Question 6

Guilford Corporation is subject to franchise tax in State Z.The tax is imposed at a rate of 2.5% of the taxpayer's net worth that is apportioned to the state by use of a two factor (sales and property equally weighted)formula.The property factor includes real and tangible personal property,valued at net book value at the end of the taxable year. Sixty percent of Guilford's sales are attributable to Z,and $200,000 of the net book value of Guilford's tangible personal property is located in Z.
Determine the Z franchise tax payable by Guilford this year,given the following end-of-the year balance sheet.

Accepted Answer

A) $0,due to the negative retained earnings. 
B) $6,050. 
C) $8,250. 
D) $13,750. 
A) $0,due to the negative retained earnings. 
B) $6,050. 
C) $8,250. 
D) $13,750.

Question 7

In determining taxable income for state income tax purposes,the Federal NOL deduction typically constitutes a(n)____________________ modification.

Accepted Answer

The answer of In determining taxable income for state income...

Question 8

Typically exempt from the sales/use tax base is the purchase of prescription medicines by an individual.

Accepted Answer

A) True 
 B)False

Question 9

Cruz Corporation owns manufacturing facilities in States A,B,and C. A uses a three-factor apportionment formula under which the sales,property and payroll factors are equally weighted.B uses a three-factor apportionment formula under which sales are double-weighted.C employs a single-factor apportionment factor,based solely on sales.
Cruz's operations generated $1,000,000 of apportionable income,and its sales and payroll activity and average property owned in each of the three states is as follows.
  Cruz's apportionable income assigned to C is:

Accepted Answer

A) $1,000,000. 
B) $273,333. 
C) $200,000. 
D) $0. 
A) $1,000,000. 
B) $273,333. 
C) $200,000. 
D) $0.

Question 10

Under P.L.86-272,which of the following transactions by itself would create nexus with a state?

Accepted Answer

A) Inspection by a sales employee of the customer's inventory for specific product lines. 
B) Using an independent contractor who acts as a manufacturer's representative for the taxpayer through a sales office in the state. 
C) Executing a sales campaign,using an advertising agency acting as an independent contractor for the taxpayer. 
D) Maintenance of inventory in the state by an independent contractor under a consignment plan. 
A) Inspection by a sales employee of the customer's inventory for specific product lines. 
B) Using an independent contractor who acts as a manufacturer's representative for the taxpayer through a sales office in the state. 
C) Executing a sales campaign,using an advertising agency acting as an independent contractor for the taxpayer. 
D) Maintenance of inventory in the state by an independent contractor under a consignment plan.

Question 11

Valdez 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.     Valdez's O property factor is:

Accepted Answer

A) 35.0%. 
B) 37.2%. 
C) 39.5%. 
D) 53.8%. 
A) 35.0%. 
B) 37.2%. 
C) 39.5%. 
D) 53.8%.

Question 12

Boot Corporation is subject to income tax in States A and B. Boot's operations generated $200,000 of apportionable income,and its sales and payroll activity and average property owned in each of the states is as follows.   How much more (less)of Boot's income is subject to A income tax if,instead of using an equally-weighted three-factor apportionment formula,A uses a formula with a double-weighted sales factor?

Accepted Answer

A) ($50,000). 
B) $50,000. 
C) $16,100. 
D) ($16,100). 
A) ($50,000). 
B) $50,000. 
C) $16,100. 
D) ($16,100).

Question 13

Bobby and Sally work for the same employer,Wooster Manufacturing.Bobby manages the company's speculative investment portfolio,and Sally is a foreman in the factory.How are the salaries paid to Bobby and Sally treated in computing Wooster's payroll factor? Apply the general UDITPA rules.

Accepted Answer

Only compensation that is related to the

Question 14

Usually a business chooses a location where it will build a new plant based chiefly on tax considerations.

Accepted Answer

A) True 
 B)False

Question 15

The benefits of a passive investment company typically include:

Accepted Answer

A) Reduced state income taxes. 
B) Isolation of the entity's portfolio income from taxation in other nonunitary states. 
C) Exclusion of the subsidiary's portfolio income from the parent corporation's apportionment formula denominator in other nonunitary states. 
D) All of the above are benefits. 
A) Reduced state income taxes. 
B) Isolation of the entity's portfolio income from taxation in other nonunitary states. 
C) Exclusion of the subsidiary's portfolio income from the parent corporation's apportionment formula denominator in other nonunitary states. 
D) All of the above are benefits.

Question 16

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

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

All of the U.S.states use an apportionment formula based on the sales,property,and payroll factors.

Accepted Answer

A) True 
 B)False

Question 19

Pail Corporation is a merchandiser.It purchases overstock garments from various suppliers and sells the goods in its State L retail store.Determine the total sales that are subject to the L consumer sales tax.

Accepted Answer

Pail must collect L sales tax on $700,00

Question 20

Parent and Junior form a non-unitary group of corporations.Parent is located in a state with an effective tax rate of 3%,while Junior's effective tax rate is 9%.Acting in concert to reduce overall tax liabilities,the group should:

Accepted Answer

A) Execute an intercompany loan,such that Junior pays deductible interest to Parent. 
B) Have Parent charge Junior an annual management fee. 
C) Shift Parent's high-cost assembly and distribution operations to Junior. 
D) All of the above are effective income-shifting techniques for a non-unitary group. 
E) None of the above is an effective income-shifting technique for a non-unitary group. 
A) Execute an intercompany loan,such that Junior pays deductible interest to Parent. 
B) Have Parent charge Junior an annual management fee. 
C) Shift Parent's high-cost assembly and distribution operations to Junior. 
D) All of the above are effective income-shifting techniques for a non-unitary group. 
E) None of the above is an effective income-shifting technique for a non-unitary group.

An ad valorem property tax is based on the asset's current ____________________.

When a _________________________ is in effect,out-of-state sales that are not subject to tax in the destination state are pulled back into the sales factor numerator of the origination state.

In determining taxable income for state income tax purposes,the Federal NOL deduction typically constitutes a(n)____________________ modification.

Typically exempt from the sales/use tax base is the purchase of prescription medicines by an individual.

Under P.L.86-272,which of the following transactions by itself would create nexus with a state?

Bobby and Sally work for the same employer,Wooster Manufacturing.Bobby manages the company's speculative investment portfolio,and Sally is a foreman in the factory.How are the salaries paid to Bobby and Sally treated in computing Wooster's payroll factor? Apply the general UDITPA rules.

Usually a business chooses a location where it will build a new plant based chiefly on tax considerations.

The benefits of a passive investment company typically include:

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

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.

All of the U.S.states use an apportionment formula based on the sales,property,and payroll factors.

Pail Corporation is a merchandiser.It purchases overstock garments from various suppliers and sells the goods in its State L retail store.Determine the total sales that are subject to the L consumer sales tax.

Parent and Junior form a non-unitary group of corporations.Parent is located in a state with an effective tax rate of 3%,while Junior's effective tax rate is 9%.Acting in concert to reduce overall tax liabilities,the group should:

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

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

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 16: Multistate Corporate Taxation

An ad valorem property tax is based on the asset's current ____________________.

When a _________________________ is in effect,out-of-state sales that are not subject to tax in the destination state are pulled back into the sales factor numerator of the origination state.

In determining taxable income for state income tax purposes,the Federal NOL deduction typically constitutes a(n)____________________ modification.

Typically exempt from the sales/use tax base is the purchase of prescription medicines by an individual.

Under P.L.86-272,which of the following transactions by itself would create nexus with a state?

Bobby and Sally work for the same employer,Wooster Manufacturing.Bobby manages the company's speculative investment portfolio,and Sally is a foreman in the factory.How are the salaries paid to Bobby and Sally treated in computing Wooster's payroll factor? Apply the general UDITPA rules.

Usually a business chooses a location where it will build a new plant based chiefly on tax considerations.

The benefits of a passive investment company typically include:

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

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.

All of the U.S.states use an apportionment formula based on the sales,property,and payroll factors.

Pail Corporation is a merchandiser.It purchases overstock garments from various suppliers and sells the goods in its State L retail store.Determine the total sales that are subject to the L consumer sales tax.

Parent and Junior form a non-unitary group of corporations.Parent is located in a state with an effective tax rate of 3%,while Junior's effective tax rate is 9%.Acting in concert to reduce overall tax liabilities,the group should:

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

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

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters