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Question;13965;Sage, Inc., a closely held corporation that is not a PSC, has a $110,000;passive loss, $90,000 of active income, and $25,000 of portfolio income during;the year. How much of the passive loss can Sage deduct in the current year?;a.;$0.;b. $25,000.;c. $90,000.;d. $110,000.;e. None of the above.;14066;During the current year, Violet, Inc., a closely held corporation (not a PSC);has $130,000 of passive loss, $90,000 of active business income, and $70,000 of;portfolio income. How much is Violet?s taxable income for the current year?;a.;$30,000.;b. $70,000.;c. $90,000.;d. $160,000.;e. None of the above.;14167;Grocer Services Corporation (a calendar year taxpayer), a wholesale distributor;of food, made the following donations to qualified charitable organizations;during the year;Adjusted Basis;Fair Market Value;Food (held as inventory) donated to the Ohio;Children?s Shelter;$3,500;$8,000;Passenger van to Ohio Children?s Shelter, to be;used to;transport children to school;7,500;7,100;Stock in Acme Corporation acquired 7 months ago;and;held as an investment, donated to;Southwest University;4,000;6,200;How much qualifies for the charitable contribution deduction?;a.;$15,000.;b. $16,850.;c. $17,250.;d. $19,450.;e. None of the above.;14268;In the current year, Plum Corporation, a computer manufacturer, donated 100;laptop computers to a local school district (a qualified educational;organization). The computers were constructed by Plum earlier this year, and;the school district allocated the computers among its various schools where;they will be used for educational purposes. Plum?s basis in the computers is;$50,000, and their fair market value is $120,000. What is Plum?s deduction for;the contribution of the computers (ignoring the taxable income limitation)?;a.;$0.;b. $50,000.;c. $85,000.;d. $100,000.;e. $120,000.;14369;During the current year, Kingbird Corporation (a calendar year C corporation);had the following income and expenses;Income from operations;$135,000;Expenses from operations;99,000;Dividends received (40% ownership);9,000;Domestic production activities deduction;2,700;On October 1, Kingbird Corporation made a contribution to a qualified;charitable organization of $6,300 in cash (not included in any of the above;items). Determine Kingbird?s charitable contribution deduction for the current;year.;a.;$0.;b. $4,230.;c. $4,500.;d. $6,300.;e. None of the above.;14470;Hippo, Inc., a calendar year C corporation, manufactures golf gloves. For 2011;Hippo had taxable income (before DPAD) of $800,000, qualified domestic;production activities income of $950,000, and W-2 wages related to qualified;production activities income of $130,000. Hippo?s domestic production;activities deduction for 2011 is;a.;$0.;b. $65,000.;c. $72,000.;d. $85,500.;e. None of the above.;14571;In the current year, Amber, Inc., a calendar C corporation, has income from;operations of $200,000 and operating deductions of $225,000. Amber also had;$30,000 of dividends from a 25% stock ownership in a domestic corporation.;Which of the following statements is incorrect;with respect to Amber?s net operating loss deduction?;a.;The NOL is carried back 3 years and forward 10 years by Amber.;b. Amber?s NOL is $19,000.;c. A dividends received deduction is;allowed in computing Amber?s NOL.;d. Amber can elect to forgo the;carryback period and only carry forward the NOL.;e. None of the above.;14672;Which of the following statements is incorrect;with respect to the treatment of net operating losses by corporations?;a.;A corporation may elect to forgo the carryback period and just carryforward an;NOL.;b. A corporation may claim a dividends;received deduction in computing an NOL.;c. An NOL is generally carried back 2;years and forward 20 years.;d. Unlike individuals, corporations do;not adjust their NOLs for net capital losses or nonbusiness deductions.;e. None of the above.;14773;Red Corporation, which owns stock in Blue Corporation, had net operating income;of $200,000 for the year. Blue pays Red a dividend of $40,000. Red takes a;dividends received deduction of $28,000. Which of the following statements is;correct?;a.;Red owns 80% of Blue Corporation.;b. Red owns 20% or more, but less than;80% of Blue Corporation.;c. Red owns less than 20% of Blue;Corporation.;d. Red owns 80% or more of Blue;Corporation.;e. None of the above.;14874;Eagle Corporation owns stock in Hawk Corporation and has taxable income of;$100,000 for the year before considering the dividends received deduction. Hawk;Corporation pays Eagle a dividend of $130,000, which was considered in;calculating the $100,000. What amount of dividends received deduction may Eagle;claim if it owns 25% of Hawk?s stock?;a.;$0.;b. $80,000.;c. $100,000.;d. $104,000.;e. None of the above.;14975;Copper Corporation owns stock in Bronze Corporation and has net operating;income of $900,000 for the year. Bronze Corporation pays Copper a dividend of;$150,000. What amount of dividends received deduction may Copper claim if it;owns 65% of Bronze stock (assuming Copper?s dividends received deduction is not;limited by its taxable income)?;a.;$97,500.;b. $105,000.;c. $120,000.;d. $150,000.;e. None of the above.;15076;Orange Corporation owns stock in White Corporation and has net operating income;of $400,000 for the year. White Corporation pays Orange a dividend of $60,000.;What amount of dividends received deduction may Orange claim if it owns 15% of;White stock (assuming Orange?s dividends received deduction is not limited by;its taxable income)?;a.;$9,000.;b. $42,000.;c. $48,000.;d. $60,000.;e. None of the above.;15177;Which of the following statements is incorrect;regarding the dividends received deduction?;a.;A corporation must hold stock for more than 90 days in order to qualify for a;deduction with respect to dividends on such stock.;b. The taxable income limitation does;not apply with respect to the 100% deduction available to members of an;affiliated group.;c. If a stock purchase is financed 75%;by debt, the deduction for dividends on such stock is reduced by 75%.;d. The taxable income limitation does;not apply if the normal deduction (i.e., 70% or 80% of dividends) results in a;net operating loss for the corporation.;e. None of the above.;15278;Emerald Corporation, a calendar year C corporation, was formed and began operations;on July 1, 2011. The following expenses were incurred during the first tax year;(July 1 through December 31, 2011) of operations;Expenses of temporary directors and of;organizational meetings;$9,000;Fee paid to the state of incorporation;1,000;Accounting services incident to organization;2,500;Legal services for drafting the corporate charter;and bylaws;3,500;Expenses incident to the printing and sale of;stock certificates;4,000;Assuming a ? 248 election, what is the Emerald?s deduction for organizational;expenditures for 2011?;a.;$0.;b. $533.;c. $5,367.;d. $5,500.;e. None of the above.;15379;During 2011, Sparrow Corporation, a calendar year C corporation, had operating income;of $510,000, operating expenses of $370,000, a short-term capital loss of;$25,000, and a long-term capital gain of $80,000. How much is Sparrow?s tax;liability for 2011?;a.;$46,100.;b. $59,300.;c. $69,050.;d. $76,050.;e. None of the above.;15480;George Judson is the sole shareholder and employee of Black Corporation, a C;corporation that is engaged exclusively in engineering services. During the;year, Black has gross revenues of $420,000 and operating expenses (excluding;salary) of $200,000. Further, Black Corporation pays George a salary of;$190,000. The salary is reasonable in amount and George is in the 35% marginal;tax bracket irrespective of any income from Black. Assuming that Black;Corporation distributes all after-tax income as dividends, how much total;combined income tax do Black and George pay in the current year? (Ignore any;employment tax considerations.);a.;$66,675.;b. $79,925.;c. $83,325.;d. $87,500.;e. None of the above.;15581;Which of the following statements is incorrect;regarding the taxation of C corporations?;a.;The highest corporate marginal tax rate is 39%.;b. Taxable income of a personal service;corporation is taxed at a flat rate of 35%.;c. A tax return must be filed whether or;not the corporation has taxable income.;d. Similar to those applicable to;individuals, the marginal tax rate brackets for corporations are adjusted for;inflation.;e. None of the above.;15682;Which of the following statements is correct regarding the taxation of C;corporations?;a.;The due date for a corporate income tax return (ignoring extensions) is the;fifteenth day of the third month following the close of the corporation?s tax;year.;b. A corporation with taxable income of;less than $500 need not file a tax return.;c. The alternative minimum tax does not;apply.;d. In general, the required annual payment;for corporate estimated taxes is 90% of the corporation?s final tax for the;current year.;e. None of the above.;15783;Vireo Corporation, a calendar year C corporation, has taxable income of $1.3;million and $3 million for 2010 and 2011, respectively. The minimum 2011;estimated tax installment payments for Vireo are;a.;April 15, 2011, $110,500, June 15, 2011, $110,500, September 15, 2011;$110,500, December 15, 2011, $110,500.;b. April 15, 2011, $110,500, June 15;2011, $399,500, September 15, 2011, $399,500, December 15, 2011, $399,500.;c. April 15, 2011, $110,500, June 15;2011, $399,500, September 15, 2011, $255,000, December 15, 2011, $255,000.;d. April 15, 2011, $255,000, June 15;2011, $255,000, September 15, 2011, $255,000, December 15, 2011, $255,000.;e. None of the above.;15884;Schedule M-1 of Form 1120 is used to reconcile financial net income with;taxable income reported on the corporation?s income tax return as follows: net;income per books + additions ? subtractions = taxable income. Which of the;following items is an addition on;Schedule M-1?;a.;Premiums paid on key employee life insurance.;b. Proceeds of life insurance paid on;death of key employee.;c. Charitable contributions carryover;from previous year.;d. Tax-exempt interest.;e. None of the above.;15985;Schedule M-1 of Form 1120 is used to reconcile financial net income with;taxable income reported on the corporation?s income tax return as follows: net;income per books + additions ? subtractions = taxable income. Which of the;following items is a subtraction on;Schedule M-1?;a.;Proceeds on key employee life insurance.;b. Excess of capital losses over capital;gains.;c. Book depreciation in excess of tax;depreciation.;d. Income subject to tax but not;recorded on the books.;e. None of the above.

 

Paper#59206 | Written in 18-Jul-2015

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