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Question;1929. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question PR #14;Pail Corporation is a merchandiser. It purchases overstock garments from;various suppliers and sells the goods in its State L retail store. Determine;the total sales that are subject to the L consumer sales tax.;Sales to L;residents;$800,000;Sales to;homeless shelters;75,000;Sales to;residents who cross the border from nearby State M;100,000;Sales to a;similar merchandiser, located in another L town;50,000;1930. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question PR #15;Indicate for each transaction whether a sales (S) or use (U) applies, or;whether the transaction is nontaxable (N). Where the laws vary among various;states, assume that the most common rules apply. All taxpayers are individuals.;a.;A resident;of State A purchases a computer in A.;b.;A resident;of State A purchases prescription medicine in A.;c.;A resident;of State B purchases a computer in A.;d.;A church;purchases office supplies in A.;e.;A State A;retailer purchases in B an item that will be in the inventory of its;business.;f.;A resident;of State A purchases hardware from a retail home improvement store in A.;g.;A business;based in State A purchases vacant A land, to be held for a future expansion;project.;h.;A business;based in State A purchases repair services from an A plumbing contractor.;1931. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question PR #16;Hambone Corporation is subject to the State E capital stock tax. The tax is;levied at 2% of the entity?s net worth that is apportioned to E. Hambone;conducts 30% of its operations in E. Hambone?s current book balance sheet is as;follows, with amounts in millions. Compute Hambone?s liability for the E;capital stock tax.;Cash;$ 10;Payables;$ 30;Receivables;50;Mortgages;principal;400;Equipment;net of accumulated;depreciation;140;Common stock;10;Buildings;net of accumulated;depreciation;300;Additional;paid-in capital;160;Land;200;Retained;earnings;100;Total assets;$700;Total liabilities and equity;$700;1932. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question PR #17;Hermann Corporation is based in State A (corporate income tax rate 10%). It;sells its goods to customers in both A and State B (corporate income tax rate;4%). Hermann?s state taxable income for the year is $1 million, 30% of which;relates to B customers. Hermann?s level of activities in B is insufficient to;create nexus there, but A has adopted a throwback rule as to multistate sales.;Would Hermann reduce its total state income tax liability by creating nexus;with B, say by allowing its sales force to make credit decisions? Elaborate.;1933. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #1;A local business wants your help in making a decision about a large capital;investment. Should your advice concentrate on tax or non-tax implications of;the decision?;1934. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #2;Your supervisor has shifted your responsibilities from the Federal corporate;income tax to a multistate corporate income tax practice. On which issues, if;any, are the tax bases and procedures likely to overlap?;1935. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #3;Compost Corporation has finished its computation of Federal taxable income. In;State Q, the derivation of state corporate taxable income starts with the;Federal amount and makes a number of modifications. List at least five such;modifications that Compost is likely to encounter.;1936. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #4;A number of court cases in the last several decades have involved the;application of a state?s nexus rules concerning a business taxpayer. What is;the significance of the term nexus;when discussing state income taxation?;1937. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #5;Discuss how a multistate business divides up its corporate taxable income among;the states in which it operates. Hint;use the terms allocation and apportionment in your comments.;1938. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #6;A state wants to increase its income tax collections, but politically it would;be unwise to raise taxes on in-state individuals or businesses. Identify some;changes to the income tax apportionment formula that would shift the scheduled;income tax increases to out-of-state businesses.;1939. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #7;You attend a tax webinar in which the presenter mentions the ?ultimate;destination concept.? Define this term, and identify at least two of the most;important exceptions to the general rule.;1940. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #8;List which items are included in the payroll factor of a state. Consider all;forms of compensation that an employee might receive. Apply the general UDITPA;rules.;1941. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #9;Sylvia spends time working at the offices of her employer as a consultant to;clients who are located in three different U.S. states. To which state(s)?;payroll factor(s) is Sylvia?s compensation assigned? Apply the general UDITPA;rules.;1942. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #10;Bobby and Sally work for the same employer, Wooster Manufacturing. Bobby;manages the company?s speculative investment portfolio, and Sally is a foreman;in the factory. How are the salaries paid to Bobby and Sally treated in;computing Wooster?s payroll factor? Apply the general UDITPA rules.;1943. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #11;Identify some state/local income tax issues facing pass-through entities such;as S corporations, partnerships, and LLCs.;1944. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #12;The sales/use tax that is employed by most U.S. states does not fall on all;retail transactions. Identify at least five sales/use tax exemptions that;states often allow, eliminating certain transactions from the tax base.;1945. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #13;Summarize the principles of multistate tax planning.;1946. CHAPTER;16?MULTISTATE CORPORATE TAXATION Question ES #14;Your client wants to reduce its overall state/local income tax rate. It holds;income-producing assets of various types, including tangible personal property;rental land and buildings, and high-yield stocks and bonds. How might this;taxpayer restructure its operations to achieve the desired tax result?

 

Paper#59253 | Written in 18-Jul-2015

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