Exam 15: Corporate Taxation

Gold Corporation sells baseball bats and reported net income of $35,000 before charitable contributions. It contributed 100 bats to a local high school. Each bat has a FMV of $40 and a basis of $30. Determine Gold's taxable income and charitable contribution carryforward.

What is the AMT exemption amount for a corporation with AMT income of $250,000?

Windy Company has taxable income before DRD of $200,000. Included in that amount is a $10,000 dividend from a domestic corporation owned 10% by Windy and a $30,000 dividend from a domestic corporation owned 60% by Windy. What is the taxable income of Windy Company?

A C corporation has a fiscal year-end of August 30. It requests an automatic extension of time to file its income tax return. It must file its return no later than the 15^th day of:

Kyung formed a corporation and owns all of the stock. He contributed property with a FMV of $90,000 and a basis of $85,000, and he received $15,000 cash from the corporation. Kyung's basis in his stock is:

All C corporations file their tax returns using a Form 1120.

Grape Corporation makes a nonliquidating distribution of appreciated property to its shareholders.

As part of a corporate formation meeting the 80% test, an individual who contributes property and receives, in return, stock plus property, will report a taxable gain equal to the lower of the FMV of the property received or the gain on the transfer.

A corporation can choose to voluntarily revoke a valid Subchapter S election. How do the shareholders accomplish a voluntary revocation and when will the revocation be effective?

Purple Company makes and sells computer printers. It has taxable income of $1,300,000 before taking into account charitable contributions. The company contributed a parcel of unused land to an art museum to be used to construct a branch museum. The land had a FMV of $50,000 and a basis of $30,000. The company also donated 1,000 of its computer printers to the local community college for use in student computer labs. The printers have a FMV of $200 each and a basis of $120 each. Determine the taxable income of Purple Company and its charitable contribution carryforward, if any.

Black Company is a Subchapter S corporation. It reported book income of $100,000. Included in that amount is dividend income of $5,000, a net capital loss of $4,000, and a charitable contribution of $20,000. Determine the ordinary income/loss of the corporation and the nature and amount of any separately stated items.

Blue Company has taxable income of $90,000 before charitable contributions. The company made a $10,000 cash contribution to the local university. What is the tax liability of the company for the year?

Willow Corporation has book income of $300,000, which includes tax expense of $70,000. It reported a capital loss of $10,000, and tax-exempt municipal bond interest of $30,000. Willow's taxable income is:

JJJ Company has earnings and profits of $30,000. The corporation distributes property with a basis of $40,000 and a FMV of $35,000 to Jill, its sole shareholder. Her basis in the stock is $30,000. Which of the following statements is correct?

Sunshine Company has book income of $250,000. It also has tax depreciation in excess of book depreciation of $30,000 and $10,000 of interest on tax-exempt bonds. Without regard to tax expense, what is Sunshine's taxable income?

The basis of a shareholder in his or her Subchapter S stock is increased by his or her share of corporate charitable contributions.

A corporation makes a pro rata distribution of property to its shareholders as part of its normal operations. The FMV of the property is less than its basis. The corporation will record a loss on the distribution.

Saffron Corporation has book income of $200,000, which includes tax expense of $40,000 and a net capital loss of $10,000. Saffron's taxable income is:

Red Corporation has taxable income before DRD of $174,000. Included in that amount is a dividend of $20,000 from a large publicly-traded domestic corporation. Red also made a $25,000 cash contribution to a qualified charitable organization. The contribution is not included in the net income amount given. What is taxable income of Red Corporation?

MMM Company has taxable income of $300,000. The company received a dividend of $50,000 from a domestic corporation in which it holds a 60% ownership interest. It also has tax depreciation that is $20,000 greater than financial statement depreciation. These items were properly accounted for in determining taxable income. Without regard to tax expense, what is financial statement income of MMM Company?