Question 1

Jazz Corporation owns 10% of the Williams Corp. stock. Williams distributed a $10,000 dividend to Jazz Corporation. Jazz Corp.'s taxable income (loss)  before the dividend was ($6,000) . What is the amount of Jazz's dividends received deduction on the dividend it received from Williams Corp.?

Accepted Answer

A)   $2,800.
B)   $0.
C)   $4,200.
D)   $7,000.
E)   None of the choices are correct.F) C) and D)
G) All of the above

Question 2

The amount of a corporation's AMT is the amount of its tentative minimum tax in excess of its regular tax.

Accepted Answer

A) True 
 B)False

Question 3

Atom Ventures Inc. (AV) owns stock in the Primo and Faraday corporations. The following summarizes information relating to AV's investment in Primo and Faraday as follows:  Assuming that AV follows the general rules for reporting its income from these investments, what is the amount of AV's book-tax difference associated with the investment in these corporations (disregarding the dividends received deduction)? Is it favorable or unfavorable? Is it permanent or temporary?

Accepted Answer

$93,750, favorable, ...

Question 4

Which of the following statements is false regarding corporate estimated tax payments?

Accepted Answer

A)   Even though a corporation extends its tax return, it still must pay its tax liability for the year by three and one-half months after year-end.
B)   Corporations using the annualized income method for determining estimated tax payments project their tax liability for the year based on income from the first, second, and third quarters.
C)   Corporations must pay estimated taxes only if they have a federal income tax liability greater than $10,000 (including the alternative minimum tax) .
D)   The due dates for estimated tax payments are the 15th day of the 4th, 6th, 9th, and 12th months of the corporation's tax year.E) All of the above
F) C) and D)

Question 5

Which of the following is not an AMT adjustment?

Accepted Answer

A)   Adjustment of gain or loss on sale of depreciable assets.
B)   Adjustment for depreciation.
C)   Adjustment for domestic production activities deduction.
D)   Adjustment for adjusted current earnings (AC
E)  .E) All of the above
F) A) and D)

Question 6

A corporation with an AMTI of $400,000 will have all of its AMT exemption phased-out.

Accepted Answer

A) True 
 B)False

Question 7

Together, Kurt and Esmeralda own 60% of three corporations: RAZ, DVA, and TRE.The three corporations would be considered as what kind of controlled group for tax purposes?

Accepted Answer

A)   Combined.
B)   Parent-subsidiary.
C)   Brother-sister.
D)   The three corporations would not be considered to be a controlled group for tax purposes.E) A) and B)
F) A) and C)

Question 8

Small corporations (in terms of average annual gross receipts) are exempt from the alternative minimum tax.

Accepted Answer

A) True 
 B)False

Question 9

In 2017, LuxAir Inc. (LA) has book income of $160,000. Included in this figure is income generated from ownership in Jet Repair Corporation (JRC), of which LA owns 30%. JRC has $270,000 inearnings for the year and pays $32,000 in dividends to LA. Assuming accounting for the investment in JRC (income from JRC and the DRD) are its only book-tax differences, what is LA's tax liability for 2017? (Use Corporate Tax Rate Schedule.)

Accepted Answer

$17,286, c...

Question 10

Corporations may carry excess charitable contributions forward five years, but they may not carry them back.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following regarding Schedule M-1 and Schedule M-3 of Form 1120 isfalse?

Accepted Answer

A)   Both Schedules M-1 and M-3 reconcile to a corporation's bottom line taxable income.
B)   Schedule M-1 does not distinguish between temporary and permanent book-tax differences whereas Schedule M-3 does.
C)   In general, smaller corporations are required to complete Schedule M-1 while larger corporations are required to complete Schedule M-3.
D)   Schedule M-3 lists more book-tax differences than Schedule M-1.E) None of the above
F) A) and D)

Question 12

Canny Foods Co. is considering three ways it could contribute to a local, qualified charity. First, it could give $5,000 in cash. Second, it could give stock it initiallypurchased two years ago for $4,000 but is now worth $6,000. Third, it could give items of inventory with a fair market value of $7,000 but with an adjusted basis of $3,000. Which of the following correctly describes the relation among possible charitablecontributions in terms of amount deductible for tax purposes?

Accepted Answer

A)   Stock > Cash > Inventory.
B)   Inventory > Stock > Cash.
C)   Inventory > Cash > Stock.
D)   Cash > Stock > Inventory.E) All of the above
F) A) and D)

Question 13

In the current year, Auto Rent Corporation reported the following taxable income at the end of its first, second, and third quarters: (Use Exhibit 16-11)   What amount of estimated tax payments would Auto Rent pay each quarter in order to avoid estimated tax penalties under the annualized income method of computing estimated tax payments? (Use Corporate Tax Rate Schedule.)

Accepted Answer

First quarter $510,000; ($1,500,000 × 4 ...

Question 14

For tax purposes, a corporation may deduct the entire amount of a net capital loss in the year incurred.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements regarding excess charitable contributions(contributions in excess of the modified taxable income limitation)  by corporations is true?

Accepted Answer

A)   Corporations can carry excess charitable contributions over to a future year but not back to a prior year.
B)   Corporations can carry excess charitable contributions over to a future year or back to a prior year.
C)   Corporations may not carry over or carry back excess charitable contributions.
D)   Corporations can carry excess charitable contributions back to a prior year but not over to a future year.E) A) and C)
F) A) and B)

Question 16

Which of the following is deductible in calculating DRD modified taxable income?

Accepted Answer

A)   NOL carryovers.
B)   NOL carrybacks.
C)   Charitable contribution deduction.
D)   Dividends received deduction.E) A) and B)
F) All of the above

Question 17

Bingo Corporation incurred a net operating loss in 2017. If Bingo carries the loss back, it must first carry the loss back to offset its 2016 taxable income and then carry anyremaining loss back to offset its 2015 taxable income.

Accepted Answer

A) True 
 B)False

Question 18

A corporation may carry a net capital loss back three years and forward five years.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following describes the correct treatment of nonqualified stock options(NQOs)  granted when ASC 718 did not apply?

Accepted Answer

A)   Financial-expense value over vesting period; tax-deduct bargain element at exercise.
B)   Financial-expense value over vesting period; tax-no deduction.
C)   Financial-no expense; tax-deduct bargain element at exercise.
D)   Financial-no expense; tax-no deduction.E) A) and B)
F) C) and D)

Question 20

The tax rate for the corporate alternative minimum tax is a flat 26%.

Accepted Answer

A) True 
 B)False

Exam 16: Corporate Operations

The tax rate for the corporate alternative minimum tax is a flat 26%.

Correct Answer
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Small corporations (in terms of average annual gross receipts) are exempt from the alternative minimum tax.

Correct Answer
verified

Correct Answer
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First quarter $510,000; ($1,500,000 × 4 ...
View Answer

Which of the following describes the correct treatment of nonqualified stock options(NQOs) granted when ASC 718 did not apply?

Correct Answer
verified

Which of the following regarding Schedule M-1 and Schedule M-3 of Form 1120 isfalse?

Correct Answer
verified

Bingo Corporation incurred a net operating loss in 2017. If Bingo carries the loss back, it must first carry the loss back to offset its 2016 taxable income and then carry anyremaining loss back to offset its 2015 taxable income.

Correct Answer
verified

A corporation may carry a net capital loss back three years and forward five years.

Correct Answer
verified

Correct Answer
verified

Corporations may carry excess charitable contributions forward five years, but they may not carry them back.

Correct Answer
verified

A corporation with an AMTI of $400,000 will have all of its AMT exemption phased-out.

Correct Answer
verified

Correct Answer
verified
$93,750, favorable, ...
View Answer

Together, Kurt and Esmeralda own 60% of three corporations: RAZ, DVA, and TRE.The three corporations would be considered as what kind of controlled group for tax purposes?

Correct Answer
verified

Correct Answer
verified
$17,286, c...
View Answer

For tax purposes, a corporation may deduct the entire amount of a net capital loss in the year incurred.

Correct Answer
verified

Which of the following statements is false regarding corporate estimated tax payments?

Correct Answer
verified

The amount of a corporation's AMT is the amount of its tentative minimum tax in excess of its regular tax.

Correct Answer
verified

Jazz Corporation owns 10% of the Williams Corp. stock. Williams distributed a $10,000 dividend to Jazz Corporation. Jazz Corp.'s taxable income (loss) before the dividend was ($6,000) . What is the amount of Jazz's dividends received deduction on the dividend it received from Williams Corp.?

Correct Answer
verified

Which of the following statements regarding excess charitable contributions(contributions in excess of the modified taxable income limitation) by corporations is true?

Correct Answer
verified

Which of the following is not an AMT adjustment?

Correct Answer
verified

Which of the following is deductible in calculating DRD modified taxable income?

Correct Answer
verified

Exam 16: Corporate Operations

The tax rate for the corporate alternative minimum tax is a flat 26%.

Correct AnswerverifiedShow Answer

Small corporations (in terms of average annual gross receipts) are exempt from the alternative minimum tax.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedFirst quarter $510,000; ($1,500,000 × 4 ...View AnswerShow Answer

Which of the following describes the correct treatment of nonqualified stock options(NQOs) granted when ASC 718 did not apply?

Correct AnswerverifiedShow Answer

Which of the following regarding Schedule M-1 and Schedule M-3 of Form 1120 isfalse?

Correct AnswerverifiedShow Answer

Bingo Corporation incurred a net operating loss in 2017. If Bingo carries the loss back, it must first carry the loss back to offset its 2016 taxable income and then carry anyremaining loss back to offset its 2015 taxable income.

Correct AnswerverifiedShow Answer

A corporation may carry a net capital loss back three years and forward five years.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Corporations may carry excess charitable contributions forward five years, but they may not carry them back.

Correct AnswerverifiedShow Answer

A corporation with an AMTI of $400,000 will have all of its AMT exemption phased-out.

Correct AnswerverifiedShow Answer

Correct Answerverified$93,750, favorable, ...View AnswerShow Answer

Together, Kurt and Esmeralda own 60% of three corporations: RAZ, DVA, and TRE.The three corporations would be considered as what kind of controlled group for tax purposes?

Correct AnswerverifiedShow Answer

Correct Answerverified$17,286, c...View AnswerShow Answer

For tax purposes, a corporation may deduct the entire amount of a net capital loss in the year incurred.

Correct AnswerverifiedShow Answer

Which of the following statements is false regarding corporate estimated tax payments?

Correct AnswerverifiedShow Answer

The amount of a corporation's AMT is the amount of its tentative minimum tax in excess of its regular tax.

Correct AnswerverifiedShow Answer

Jazz Corporation owns 10% of the Williams Corp. stock. Williams distributed a $10,000 dividend to Jazz Corporation. Jazz Corp.'s taxable income (loss) before the dividend was ($6,000) . What is the amount of Jazz's dividends received deduction on the dividend it received from Williams Corp.?

Correct AnswerverifiedShow Answer

Which of the following statements regarding excess charitable contributions(contributions in excess of the modified taxable income limitation) by corporations is true?

Correct AnswerverifiedShow Answer

Which of the following is not an AMT adjustment?

Correct AnswerverifiedShow Answer

Which of the following is deductible in calculating DRD modified taxable income?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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First quarter $510,000; ($1,500,000 × 4 ...
View Answer

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Correct Answer
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Correct Answer
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$93,750, favorable, ...
View Answer

Correct Answer
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Correct Answer
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$17,286, c...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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