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Hello, I have 50 questions that i need answered b...

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Hello, I have 50 questions that i need answered by Sat. they are listed below: Question 1 The "double taxation" of corporate income refers to the fact that corporate income is taxed at both the entity-level and the shareholder-level. a) True b) False Question 2 A distribution from a corporation to a shareholder will always be treated as a dividend for tax purposes. a) True b) False Question 3 A corporation's "earnings and profits" account is equal to the company's "retained earnings" account on its balance sheet. a) True b) False Question 4 A distribution from a corporation to a shareholder will only be treated as a dividend for tax purposes if the distribution is paid out of current or accumulated earnings and profits. a) True b) False Question 5 The term "earnings and profits" is well-defined in the Internal Revenue Code. a) True b) False Question 6 Income earned by flow-through entities is usually taxed once at the entity level. a) True b) False Question 7 Partnerships tax rules incorporate both the entity and aggregate approaches. a) True b) False Question 8 The term "outside basis" refers to the partnership's basis in its assets; whereas, the term "inside basis" refers an individual partner's basis in her partnership interest. a) True b) False Question 9 A partnership can elect to amortize organization and startup costs; however, syndication costs are not deductible. a) True b) False Question 10 Nonrecourse debt is generally allocated according to the profit-sharing ratios of the partnership. a) True b) False Question 11 A partner's debt relief from the sale of a partnership interest will decrease his outside basis. a) True b) False Question 12 In the sale of a partnership interest, a selling partner will recognize ordinary income (rather than capital gain) when the partnership assets include cash and land held for 5 years as an investment. a) True b) False Question 13 Hot assets include assets except cash, capital assets and ?1231 assets. a) True b) False Question 14 Operating distributions terminate a partner's interest in the partnership. a) True b) False Question 15 In an operating distribution, when a partnership distributes property other than money with a basis that exceeds the partner's outside basis, the partner assigns a carryover basis to the distributed assets and recognizes a gain. a) True b) False Question 16 Jaime has a basis in her partnership interest of $50,000 when the partnership distributes (in an operating distribution) two parcels of land to Jaime, each valued at $30,000. The basis in parcel A is $40,000 and the basis in parcel B is $20,000. Jaime allocates $20,000 of basis to parcel A and $30,000 of basis to parcel B. a) True b) False Question 17 A partner recognizes gain when he receives cash in excess of his outside basis in a liquidating distribution. a) True b) False Question 18 S corporations offer the same legal protection to owners as C corporations. a) True b) False Question 19 The S corporation rules are less complex for S corporations that have earnings and profits from prior C corporation years than for S corporations that do not have earnings and profits from prior C corporation years. a) True b) False Question 20 The same exact requirements for forming and contributing property govern S corporations and partnerships. a) True b) False Question 21 S corporations may have no more than 50 shareholders, but members of the same family only count as one shareholder. a) True b) False Question 22 Differences in voting powers are permissible across shares of S corporation stock as long as the shares have identical distribution and liquidation rights. a) True b) False Question 23 Publicly traded corporations cannot be treated as S corporations. a) True b) False Question 24 To make an S election effective as of the beginning of the current year, an S corporation must file Form 2553 within 3 ? months after the beginning of the year. a) True b) False Question 25 An S corporation may be voluntarily or involuntarily terminated. a) True b) False Question 26 Inventory is substantially appreciated if the fair market value of all inventory items exceeds 100% of their basis to the partnership. a) True b) False Question 27 Partners must generally treat the value of profits interests they receive in exchange for services as ordinary income. a) True b) False Question 28 Tax elections are rarely made at the partnership level. a) True b) False Question 29 Only income and deductions included on a corporation's income tax return are included in the computation of current earnings and profits. a) True b) False Question 30 Stock dividends are always tax-free to the recipient. a) True b) False Question 31 Gain or loss is always recognized when realized for tax purposes. a) True b) False Question 32 A taxpayer's tax basis in property always begins with its cost to the taxpayer. a) True b) False Question 33 Control as it relates to a section 351 transaction is strictly defined to be 80 percent or more of the voting power of the stock of the corporation to which property is transferred. a) True b) False Question 34 The definition of property as it relates to a section 351 transaction includes money. a) True b) False Question 35 A taxpayer must receive voting common stock to be eligible for deferral in a section 351 exchange. a) True b) False Question 36 M Corporation assumes a $200 liability attached to property transferred to it by Jane in a section 351 transaction. The assumed liability will be treated as boot received by Jane. a) True b) False Question 37 Tax considerations always are the primary reason for how an acquisition is structured. a) True b) False Question 38 The tax basis of property received by a noncorporate shareholder in a complete liquidation will be the property's fair market value. a) True b) False Question 39 Which of the following statements best describes the priority of the tax treatment of a distribution from a corporation to a shareholder? a) The distribution is a dividend to the extent of the corporation's earnings and profits, then a return of capital, and finally gain from sale of stock. b) The distribution is a return of capital, then a dividend to the extent of the corporation's earnings and profits, and finally gain from sale of stock. c) The distribution is a return of capital, then gain from sale of stock, and finally a dividend to the extent of the corporation's earnings and profits. d) The shareholder can elect to treat the distribution as either a dividend to the extent of the corporation's earnings and profits or a return of capital, followed by gain from sale of stock. Question 40 A calendar-year corporation has negative current E&P of $500 and accumulated positive E&P of $1,000. The corporation makes a $600 distribution to its sole shareholder. Which of the following statements is true? a) $500 of the distribution will be a dividend because total earnings and profits is $500. b) $0 of the distribution will be a dividend because current earnings and profits is negative. c) $600 of the distribution will be a dividend because accumulated earnings and profits is $1,000. d) Up to $600 of the distribution could be a dividend depending on the balance in accumulated earnings and profits on the date of the distribution. Question 41 Which of the following statements best describes the tax law approach to recognizing gain or loss realized in an exchange? a) Gain and loss realized is not recognized unless specifically stated otherwise in the Internal Revenue Code. b) Gain and loss realized is recognized unless specifically stated otherwise in the Internal Revenue Code. c) Gain realized is recognized unless specifically stated otherwise in the Internal Revenue Code, but loss realized is not recognized unless specifically stated otherwise in the Internal Revenue Code. d) Loss realized is recognized unless specifically stated otherwise in the Internal Revenue Code, but gain realized is not recognized unless specifically stated otherwise in the Internal Revenue Code. Question 42 Roberta transfers property with a tax basis of $400 and a fair market value of $500 to a corporation in exchange for stock with a fair market value of $350 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $150 on the property transferred. What is the amount realized by Roberta in the exchange? a) $500 b) $400 c) $350 d) $250 Question 43 Which of these items is not an adjustment to taxable income or net loss to compute current E&P?Question 43 options: a) Dividends received deduction b) Tax-exempt income c) Net capital loss carryforward from the prior year tax return d) Refund of prior year taxes for an accrual method taxpayer Question 44 Gerald received a 33% capital and profit (loss) interest in XYZ Limited Partnership (LP). In exchange for this interest, Gerald contributed a building with a FMV of $30,000. His adjusted basis in the building was $15,000. In addition, the building was encumbered with a $9,000 nonrecourse mortgage that XYZ, LP assumed at the time the property was contributed. What is Gerald's outside basis immediately after his contribution? a) $6,000 b) $9,000 c) $21,000 d) $24,000 Question 45 Under general circumstances, debt is allocated from the partnership to each partner in the following manner: a) Recourse - profit sharing ratios; nonrecourse - profit sharing ratios b) Recourse - capital ratios; nonrecourse - capital ratios c) Recourse - to partners with the ultimate responsibility for paying the debt; nonrecourse - profit sharing ratios d) Recourse - profit sharing ratios; nonrecourse - to partners with the ultimate responsibility for paying the debt Question 46 When must a partnership file its return?Question 46 options: a) By the 15th day of the 4th month after the partnerships tax year end b) By the six month after the original due date if an extension is filed c) By the 15th day of the 3rd month after the partnerships tax year end d) A and B e) B and C Question 47 Which of the following statements regarding the sale of a partnership interest is false? a) The seller's primary tax concern in a partnership interest sale is calculating the amount and character of gain or loss on the sale. b) The selling partner determines the gain or loss as the difference between the amount realized and her outside basis in the partnership. c) Hot assets change the character of a gain on the sale from ordinary income to capital gain. d) Any debt relief increases the amount the partner realizes from the sale. Question 48 Which of the following assets would not be classified as hot assets? a) Inventory b) Depreciation recapture c) Cash d) Accounts receivable for a cash method taxpayer. Question 49 Which of the following is prohibited from being an S corporation shareholder? a) Foreign citizens that are U.S. residents. b) U.S. citizens. c) Corporations. d) 51 unrelated individuals. e) None of the above. Question 50 If Annie and Andy (each a 30% shareholder) file a revocation on February 10, 2010 to terminate their S corporation's S election, what is the effective date of the S corporation termination (assuming they do not specify one)? a) January 1, 2010. b) February 10, 2010. c) January 1, 2011. d) February 10, 2011. e) None of the above.,Thanks for responding back so quickly!!!!!

 

Paper#4823 | Written in 18-Jul-2015

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