Question 1

A corporation may carry forward capital losses for an indefinite period.

Accepted Answer

A) True 
 B)False  False

Question 2

Corporations may be subject to the alternative minimum tax.

Accepted Answer

A) True 
 B)False  True

Question 3

Terry forms the Camphor Corporation during the current year.She transfers property with a value of $700,000 to Camphor Corporation in exchange for 100 percent of the stock in the corporation.Terry's basis in the property transferred was $400,000 and the corporation assumed a $275,000 mortgage on the property.If the fair market value of the stock received by Terry is $425,000,what is the corporation's basis in the property received from Terry?

Accepted Answer

A) $125,000 
B) $275,000 
C) $400,000 
D) $450,000 
E) $700,000 
A) $125,000 
B) $275,000 
C) $400,000 
D) $450,000 
E) $700,000 C

Question 4

An S corporation files a Form 1120S.

Accepted Answer

A) True 
 B)False

Question 5

Corporations may deduct without limitation any amount of charitable contributions providing the amounts are paid to qualified organizations.

Accepted Answer

A) True 
 B)False

Question 6

For 2017,what is the maximum tax rate for personal service corporations?

Accepted Answer

A) 25 percent 
B) 28 percent 
C) 34 percent 
D) 35 percent 
E) None of the above 
A) 25 percent 
B) 28 percent 
C) 34 percent 
D) 35 percent 
E) None of the above

Question 7

What is the maximum amount of accumulated earnings that a corporation is allowed to accumulate,without regard to business needs,before the accumulated earnings tax is imposed?

Accepted Answer

A) $150,000 for all corporations 
B) $150,000 for nonservice corporations only 
C) $250,000 for all corporations 
D) $250,000 for nonservice corporations only 
E) None of the above 
A) $150,000 for all corporations 
B) $150,000 for nonservice corporations only 
C) $250,000 for all corporations 
D) $250,000 for nonservice corporations only 
E) None of the above

Question 8

Corporations are granted favorable tax treatment for short-term capital losses.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is not true of S corporations?

Accepted Answer

A) S corporations are corporations that receive tax treatment similar to that given partnerships. 
B) Section 1231 gains and losses pass through separately to stockholders of an S corporation. 
C) The amount of S corporation losses that a shareholder of an S corporation may report on his or her tax return is limited to the basis of the stock plus any loans made by the shareholder to the corporation. 
D) If a taxpayer purchases stock in an S corporation from another shareholder during the year,the new shareholder may report the entire amount of any loss for the year attributable to the shares purchased. 
E) If an otherwise qualifying shareholder acquires 40 percent of the stock of an S corporation,the new shareholder cannot cause the corporation to lose its S corporation election. 
A) S corporations are corporations that receive tax treatment similar to that given partnerships. 
B) Section 1231 gains and losses pass through separately to stockholders of an S corporation. 
C) The amount of S corporation losses that a shareholder of an S corporation may report on his or her tax return is limited to the basis of the stock plus any loans made by the shareholder to the corporation. 
D) If a taxpayer purchases stock in an S corporation from another shareholder during the year,the new shareholder may report the entire amount of any loss for the year attributable to the shares purchased. 
E) If an otherwise qualifying shareholder acquires 40 percent of the stock of an S corporation,the new shareholder cannot cause the corporation to lose its S corporation election.

Question 10

As a general rule,the transfer of property by a taxpayer to a corporation in exchange solely for 100% of the stock does not result in a taxable transaction.

Accepted Answer

A) True 
 B)False

Question 11

In the current year,Parvifolia,Inc.had $400,000 of revenue from operations and $160,000 of dividends from non-affiliated 15 percent-owned domestic corporations.The corporation's deductible operating expenses totaled $410,000.What is Parvifolia,Inc.'s dividends received deduction for the current year?

Accepted Answer

A) $105,000 
B) $112,000 
C) $120,000 
D) $128,000 
E) None of the above 
A) $105,000 
B) $112,000 
C) $120,000 
D) $128,000 
E) None of the above

Question 12

S corporations pay taxes at a higher rate than do regular corporations.

Accepted Answer

A) True 
 B)False

Question 13

The Peach Corporation is a regular corporation that contributes $25,000 cash to qualified charitable organizations during the current year.The corporation has net taxable income of $190,000 before deducting the contributions.
a.​
What is the amount of Peach Corporation's allowable deduction for charitable contributions for the current year?
b.What may the corporation do with any excess amount of contributions?

Accepted Answer

The answer of The Peach Corporation is a regular corporation...

Question 14

Which of the following corporations is allowed to make an S corporation election?

Accepted Answer

A) A U.S.corporation owned and operated by two U.S.citizens (individuals). 
B) A U.S.corporation owned by a Brazilian corporation. 
C) A U.S.owned and operated corporation with 7,000 separate shareholders. 
D) None of the above could be an S corporation. 
A) A U.S.corporation owned and operated by two U.S.citizens (individuals). 
B) A U.S.corporation owned by a Brazilian corporation. 
C) A U.S.owned and operated corporation with 7,000 separate shareholders. 
D) None of the above could be an S corporation.

Question 15

On July 1,of the current year,Robert forms the Yew Corporation.In exchange for 100 percent of the corporation's stock,Robert contributes land with a fair market value of $100,000.Robert acquired the land 5 years ago at a cost of $30,000.At the date of the contribution,the land is subject to a $10,000 mortgage which the corporation assumes.What is the basis of the land to Yew Corporation?

Accepted Answer

A) $20,000 
B) $30,000 
C) $90,000 
D) $100,000 
E) None of the above 
A) $20,000 
B) $30,000 
C) $90,000 
D) $100,000 
E) None of the above

Question 16

The corporate alternative minimum tax rate is 28 percent.

Accepted Answer

A) True 
 B)False

Question 17

The Bay Fig Corporation has $350,000 of taxable income from operations for the current year,and dividends of $50,000 received from 10 percent-owned domestic corporations.How much is the Bay Fig Corporation's dividends received deduction for the current year?

Accepted Answer

A) $35,000 
B) $40,000 
C) $70,000 
D) $80,000 
E) None of the above 
A) $35,000 
B) $40,000 
C) $70,000 
D) $80,000 
E) None of the above

Question 18

ABC Company owns 40 percent of JMT Company and 95 percent of DEM Company.JMT pays an $80,000 dividend to ABC and DEM pays a $40,000 dividend to ABC in the current year.Assuming that ABC has $1,000,000 of taxable income,calculate ABC's dividends received deduction for the current year.

Accepted Answer

A) $96,000 
B) $104,000 
C) $120,000 
D) $140,000 
E) None of the above is correct 
A) $96,000 
B) $104,000 
C) $120,000 
D) $140,000 
E) None of the above is correct

Question 19

Rob,Bill,and Steve form Big Company.Rob performs $45,000 of services for his 45 shares of the company.Bill transferred property with a basis of $5,000 for $75,000 of stock (75 shares).Steve contributes cash of $100,000 for his 100 shares.Which of the three must recognize income in the year of the formation?

Accepted Answer

A) Rob 
B) Rob,Bill 
C) Bill 
D) Steve,Bill 
E) Steve,Rob 
A) Rob 
B) Rob,Bill 
C) Bill 
D) Steve,Bill 
E) Steve,Rob

Question 20

Is it correct to state that the maximum corporate tax rate is 35 percent? Please describe the structure of the corporate tax rate schedule in your answer.

Accepted Answer

For income between $100,000 and $335,000

A corporation may carry forward capital losses for an indefinite period.

Corporations may be subject to the alternative minimum tax.

An S corporation files a Form 1120S.

Corporations may deduct without limitation any amount of charitable contributions providing the amounts are paid to qualified organizations.

For 2017,what is the maximum tax rate for personal service corporations?

What is the maximum amount of accumulated earnings that a corporation is allowed to accumulate,without regard to business needs,before the accumulated earnings tax is imposed?

Corporations are granted favorable tax treatment for short-term capital losses.

Which of the following statements is not true of S corporations?

As a general rule,the transfer of property by a taxpayer to a corporation in exchange solely for 100% of the stock does not result in a taxable transaction.

S corporations pay taxes at a higher rate than do regular corporations.

Which of the following corporations is allowed to make an S corporation election?

The corporate alternative minimum tax rate is 28 percent.

The Bay Fig Corporation has $350,000 of taxable income from operations for the current year,and dividends of $50,000 received from 10 percent-owned domestic corporations.How much is the Bay Fig Corporation's dividends received deduction for the current year?

ABC Company owns 40 percent of JMT Company and 95 percent of DEM Company.JMT pays an $80,000 dividend to ABC and DEM pays a $40,000 dividend to ABC in the current year.Assuming that ABC has $1,000,000 of taxable income,calculate ABC's dividends received deduction for the current year.

Is it correct to state that the maximum corporate tax rate is 35 percent? Please describe the structure of the corporate tax rate schedule in your answer.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

Tax Administration and Tax Planning

Filters

Exam 11: The Corporate Income Tax

A corporation may carry forward capital losses for an indefinite period.

Corporations may be subject to the alternative minimum tax.

An S corporation files a Form 1120S.

Corporations may deduct without limitation any amount of charitable contributions providing the amounts are paid to qualified organizations.

For 2017,what is the maximum tax rate for personal service corporations?

What is the maximum amount of accumulated earnings that a corporation is allowed to accumulate,without regard to business needs,before the accumulated earnings tax is imposed?

Corporations are granted favorable tax treatment for short-term capital losses.

Which of the following statements is not true of S corporations?

As a general rule,the transfer of property by a taxpayer to a corporation in exchange solely for 100% of the stock does not result in a taxable transaction.

S corporations pay taxes at a higher rate than do regular corporations.

Which of the following corporations is allowed to make an S corporation election?

The corporate alternative minimum tax rate is 28 percent.

The Bay Fig Corporation has $350,000 of taxable income from operations for the current year,and dividends of $50,000 received from 10 percent-owned domestic corporations.How much is the Bay Fig Corporation's dividends received deduction for the current year?

ABC Company owns 40 percent of JMT Company and 95 percent of DEM Company.JMT pays an $80,000 dividend to ABC and DEM pays a $40,000 dividend to ABC in the current year.Assuming that ABC has $1,000,000 of taxable income,calculate ABC's dividends received deduction for the current year.

Is it correct to state that the maximum corporate tax rate is 35 percent? Please describe the structure of the corporate tax rate schedule in your answer.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

Tax Administration and Tax Planning

Filters