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ACC 455 Final Exam




Question;ACC 455 Final Exam;1);Regulations are;2);Identify which of the following statements is false.;3);Which of the following statements regarding proposed regulations is not;correct?;4);Which of the following statements about a partnership is true?;5);Which of the following is an advantage of a sole proprietorship over other;business forms?;6);Which of the following statements is incorrect?;7);Three members form an LLC in the current year. Which of the following;statements is incorrect?;8);Identify which of the following statements is true.;9);Identify which of the following statements is false;10);Barry, Dan, and Edith together form a new corporation, Barry and Dan each;contribute property in exchange for stock. Within 2 weeks after the formation;the corporation issues additional stock to Edith in exchange for property.;Barry and Dan each hold 10,000 shares and Edith will receive 9,000 shares.;Which transactions will qualify for non recognition?;11);Matt and Sheila form Krupp Corporation. Matt contributes property with a FMV of;$55,000 and a basis of $35,000. Sheila contributes property with a FMV of;$75,000 and a basis of $40,000. Matt sells his stock to Paul shortly after the;exchange. The transaction will;12);Identify which of the following statements is true.;13);Identify which of the following statements is false.;14);Identify which of the following statements is true.;15);Identify which of the following statements is true.;16);Trail Corporation has gross profits on sales of $140,000 and deductible;expenses of $180,000. In addition, Trail has a net capital gain of $60,000.;Trail's taxable income is;17);Richards Corporation has taxable income of $280,000 calculated before the;charitable contribution deduction and before its dividends-received deduction;of $34,000. Richards makes cash contributions of $35,000 to charitable;organizations. What is Richards Corporation's charitable contribution deduction;for the current year?;18);Edison Corporation is organized on July 31. The corporation starts business on;August 10. The corporation adopts a November 30 fiscal year end. The following;expenses are incurred during the year: Date Type Amount 6-30 Attorneys fees;associated with obtaining charter $10,000 7-10 Underwriter fees for stock sale;25,000 7-15 Transfer cost for property contributed to the corporation for stock;3,000 6-30 Costs of organizational meetings 2,000 12-6 Legal fees to modify;charter 4,000 What is the maximum amount of organizational expenditures that;can be deducted by the corporation for its first tax year ending November 30?;19);Which of the following items are tax preference items for purposes of arriving;at alternative minimum taxable income?;20);Which of the following is not an adjustment in calculating AMTI?;21);When computing a corporation's alternative minimum taxable income, its taxable;income is;22);Boxer Corporation buys equipment in January of the current year with a 7-year;class life for $15,000. The corporation expensed the $15,000 under Sec. 179.;The deduction in the year of purchase for E&P purposes due to the;acquisition and expensing of the equipment is;23);For purposes of determining current E&P, which of the following items;cannot be deducted in the year incurred?;24);Identify which of the following increases Earnings & Profits;25);Identify which of the following statements is true;26);Poppy Corporation was formed 3 years ago. Poppy's E&P history is as;follows: Year Current E&P Distributions 2005 $6,000 $4,000 2006 5,000 1,000;2007 1,000 -0- Poppy Corporation's accumulated E&P on January 1 will be;27);Identify which of the following statements is true;28);Hogg Corporation distributes $30,000 to its sole shareholder, Ima. At the time;of the distribution, Hoggs' E&P is $14,000 and Ima's basis in her stock is;$10,000. Ima's gain from this transaction is;29);Wills Corporation, which has accumulated and current E&P totaling $65,000;distributes land to its sole shareholder, an individual. The land has a FMV of;$75,000 and an adjusted basis of $55,000. The shareholder assumes a $15,000;liability associated with the land. The shareholder will recognize;30);Crossroads Corporation distributes $60,000 to its sole shareholder Harley.;Crossroads has earnings and profits of $55,000 and Harley's basis in her stock;is $20,000. After the distribution, Harley's basis is;31);Joshua owns 100% of Steeler Corporation's stock. Joshua's basis in the stock is;$8,000. Steeler Corporation has E&P of $40,000. If Steeler Corporation;redeems 60% of Joshua's stock for $50,000, Joshua must report dividend income;of;32);Which of the following is not a reason for a stock redemption?;33);Which of the following is not a condition that permits a stock redemption to be;treated as a sale?;34);The definition of a partnership does not include;35);Identify which of the following statements is true;36);Which one of the following individuals or entities is ineligible to be an S;corporation shareholder?;37);Identify which of the following statements is true.;38);In computing the ordinary income of a partnership, a deduction is allowed for;39);Cactus Corporation, an S Corporation, had accumulated earnings and profits of;$100,000 at the beginning of 2008. Tex and Shirley each own 50% of the stock.;Cactus does not make any distributions during 2008, but had $200,000 of;ordinary income. In 2009, ordinary income was $100,000 and distributions were;$100,000. What is Tex's ordinary income for 2009?;40);Identify which of the following statements is true.;41);On the first day of the partnership's tax year, Karen purchases a 50% interest;in a general partnership for $30,000 cash and she materially participates in;the operation of the partnership for the entire year. The partnership has;$40,000 in recourse liabilities when Karen enters the partnership. Partners;share the economic risk of loss from recourse liabilities in the same way they;share partnership losses. There is no minimum gain related to the nonrecourse;liability. During the year the partnership incurs a $120,000 loss and a $20,000;increase in liabilities. How much of the loss can Karen report on her tax;return for the current year?;42);George pays $10,000 for a 20% interest in a general partnership which has;recourse liabilities of $20,000. The partners share the economic risk of loss;from recourse liabilities in the same way they share partnership losses.;George's basis in his partnership interest is;43);Identify which of the following statements is true;44);Identify which of the following statements is true;45);For purposes of Sec. 751, inventory includes all of the following EXCEPT;46);Identify which of the following statements is false;47);Identify which of the following statements is true;48);On June 30 of the current year, the S election of Great Corporation is;terminated thus creating a 6-month S short year and a 6-month C short year.;Great Corporation is a calendar-year taxpayer. The S short year return is due


Paper#37978 | Written in 18-Jul-2015

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