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Bread Corporation is a C corporation with earnings of $100,000.




Question;Bread Corporation is a C corporation with earnings of $100,000.3. Bread Corporation is a C corporation with earnings of;$100,000. It paid $20,000 in dividends to its sole shareholder, Gerald. Gerald;also owns 100% of Butter, an S corporation. Butter had nettaxable income of;$80,000 and made a $15,000 distribution to Gerald. What income will Gerald;report from Bread and Butter?s activities?;A) $35,000;B) $95,000;C) $100,000;D) $180,000;8. Jerry transfers two assets to a corporation as part of a;Sec. 351 exchange. The first asset has an adjusted basis of $70,000 and a FMV;of $50,000. The second asset has an adjusted basis of $70,000 and a FMV of;$150,000. The FMV of the stock received is $180,000 and he also receives;$20,000 cash. The realized and recognized gain on the second asset is;A) $80,000 realized, $20,000 recognized.;B) $80,000 realized, $15,000 recognized.;C) $20,000 realized, $10,000 recognized.;D) $10,000 realized, $10,000 recognized.;9. Henry transfers property with an adjusted basis of;$95,000 and a FMV of $100,000 to a newly formed corporation in a Sec. 351;exchange. Henry receives stock with a FMV of $85,000 and a short-term note with;a $15,000 FMV. Henry's basis in the stock is;A) $100,000.;B) $95,000.;C) $90,000.;D) $85,000.;11. Lynn transfers land having a $50,000 adjusted basis, an;$80,000 FMV and $10,000 cash to Allied Corporation in exchange for 100% of;Allied's stock. The corporation assumes the $70,000 mortgage on the land. Which;of the following statements is correct?;A) Lynn recognizes no gain and the stock basis is $60,000.;B) Lynn recognizes $10,000 gain and the stock basis is;$60,000.;C) Lynn recognizes no gain and the stock basis is $50,000.;D) Lynn recognizes $10,000 gain and the stock basis is zero.;15. Super Corporation gives a painting to a museum for;public display on August 6. The painting was purchased on April 3 of the same;year for $20,000 and is worth $30,000 at the date of gift. Also, Super accrues;a charitablecontribution on December 30 and pays the $12,000 contribution on;February 1 of the next year. Super Corporation is a calendar-year corporation;that uses the accrualmethod of accounting. Before considering the 10%;limitation rule, the maximum deduction for the current year is;A) $12,000.;B) $20,000.;C) $30,000.;D) $32,000.;16. Richards Corporation has taxableincome 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;charitablecontributiondeduction for the current year?;A) $24,600;B) $28,000;C) $31,400;D) $35,000;17. Island Corporation has the following income and expense;items for the year.Gross receipts from sales $60,000 Dividends received from;15%-owned domestic corporation 40,000 Expenses connected with sales 30,000 The;taxable income of Island Corporation is;A) $100,000.;B) $70,000.;C) $47,000.;D) $42,000.;18. Money Corporation has the following income and expenses;for the taxyear.Gross profit on sales $200,000 Expenses 700,000 Dividends;received from less-than-20%-owned domestic corporations 20,000 What is Money's;netoperatingloss?;A) $494,000;B) $480,000;C) $520,000;D) $220,000;20. Foggy Corporation has regular taxable income of;$1,200,000. It has $250,000 of interest income on private activity bonds and;$100,000 of interest on City of New Orleans bonds. How much is Foggy?s;preadjustment AMTI?;A) $1,200,000;B) 1,350,000;C) $1,450,000;D) $1,550,000;21. Identify which of the following statements is false.;A) Tax-exempt interest on certain private activity bonds may;be taxed under the alternative minimum tax.;B) Tax preference items and adjustments may either increase;or decrease taxable income to obtain AMTI.;C) Depending on the date an asset is placed in service;depreciation may be an adjustment to taxable income or a tax preference item;for alternative minimum taxpurposes.;D) Different depreciation rules are used when computing;taxable income and alternative minimum taxable income.;22. Mountaineer, Inc. has the following results: Regular;corporatetax liability $400,000Taxable income 2,000,000Preferences 500,000Adjustments;(200,000)What is the amount of the alternative minimum tax?;A) $0;B) $60,000;C) $100,000;D) None of the above.


Paper#50745 | Written in 18-Jul-2015

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