Corporate Taxation MCQs
- ?Alan, Baker, and Carr formed Dexter Corporation during
2013. Pursuant to the incorporation agreement, Alan transferred
property with an adjusted bas...
- ?Jones incorporated a sole proprietorship by exchanging all
the proprietorship’s assets for the stock of Nu Co., a new corporation.
To qualify for ...
- ?Feld, the sole stockholder of Maki Corp., paid $50,000 for
Maki’s stock in 2007. In 2013, Feld contributed a parcel of land
to Maki but was not gi...
- ?Rela Associates, a partnership, transferred all of its assets,
with a basis of $300,000, along with liabilities of $50,000, to a
newly formed corpor...
- ?Roberta Warner and Sally Rogers formed the Acme
Corporation on October 1, 2012. On the same date Warner paid
$75,000 cash to Acme for 750 shares of ...
- ?Jackson, a single individual, inherited Bean Corp. common
stock from Jackson’s parents. Bean is a qualified small business
corporation under Code ...
- ?Which of the following is not a requirement for stock to
qualify as Sec. 1244 small business corporation stock?
- ?During the current year, Dinah sold Sec. 1244 small business
corporation stock that she owned for a loss of $125,000.
Assuming Dinah is married and ...
- ?Nancy, who is single, formed a corporation during 2007
using a tax-free asset transfer that qualified under Sec. 351. She
transferred property havin...
- ?A civil fraud penalty can be imposed on a corporation that
underpays tax by
- ?Bass Corp., a calendar-year C corporation, made qualifying
2012 estimated tax deposits based on its actual 2011 tax liability.
On March 15, 2013, Ba...
- ?Edge Corp., a calendar-year C corporation, had a net operating
loss and zero tax liability for its 2012 tax year. To avoid the
penalty for underpaym...
- ?A corporation’s tax year can be reopened after all statutes of
limitations have expired if
I. The tax return has a 50% nonfraudulent omission from...
- ?A corporation’s penalty for underpaying federal estimated
- ?Blink Corp., an accrual-basis calendar-year corporation,
carried back a net operating loss for the tax year ended December
31, 2012. Blink’s gross...
- ?When computing a corporation’s income tax expense for
estimated income tax purposes, which of the following should be
taken into account?
- ?Finbury Corporation’s taxable income for the year ended
December 31, 2012, was $2,000,000 on which its tax liability was
$680,000. In order for Fi...
- ?Green Corp. was incorporated and began business in 2010.
In computing its alternative minimum tax for 2011, it determined
that it had adjusted curre...
- ?Eastern Corp., a calendar-year corporation, was formed
during 2011. On January 3, 2012, Eastern placed five-year property
in service. The property w...
- ?If a corporation’s tentative minimum tax exceeds the regular
tax, the excess amount is
- ?Rona Corp.’s 2012 alternative minimum taxable income was
$200,000. The exempt portion of Rona’s 2012 alternative minimum
taxable income was
- ?A corporation’s tax preference items that must be taken into
account for 2013 alternative minimum tax purposes include
- ?In computing its 2013 alternative minimum tax, a corporation
must include as an adjustment
- ?A corporation will not be subject to the alternative minimum
tax for calendar year 2013 if
- ?Bradbury Corp., a calendar-year corporation, was formed on
January 2, 2009, and had gross receipts for its first four taxable
years as follows:
- ?Which of the following entities must include in gross income
100% of dividends received from unrelated taxable domestic
corporations in computing re...
- ?Andi Corp. issued $1,000,000 face amount of bonds in 2004
and established a sinking fund to pay the debt at maturity. The
bondholders appointed an i...
- ?The following information pertains to treasury stock sold by
Lee Corp. to an unrelated broker in 2013:
Proceeds received $50,000
- ?During 2013, Ral Corp. exchanged 5,000 shares of its own
$10 par common stock for land with a fair market value of
$75,000. As a result of this exch...
- ?If an S corporation has no accumulated earnings and profits,
the amount distributed to a shareholder
- ?A corporation that has been an S corporation from its
Have both passive and nonpassive income
Be owned by a bankruptcy estate
- ?Bern Corp., an S corporation, had an ordinary loss of
$36,600 for the year ended December 31, 2012. At January 1,
2012, Meyer owned 50% of Bern’s ...
- ?A calendar-year corporation whose status as an S corporation
was terminated during 2012 must wait how many years
before making a new S election, in ...
- ?Which one of the following will render a corporation
ineligible for S corporation status?
- ?With regard to S corporations and their stockholders, the
“at risk” rules applicable to losses
- ?An S corporation may deduct
- ?An S corporation’s accumulated adjustments account,
which measures the amount of earnings that may be distributed
- ?If a calendar-year S corporation does not request an automatic
six-month extension of time to file its income tax return,
the return is due by
- ?An S corporation is not permitted to take a deduction for
- ?An S corporation may
- ?Which of the following is not a requirement for a corporation
to elect S corporation status (Subchapter S)?
- ?Brooke, Inc., an S corporation, was organized on January 2,
2012, with two equal stockholders who materially participate in
the S corporation’s bu...
- ?Jaxson Corp. has 200,000 shares of voting common stock
issued and outstanding. King Corp. has decided to acquire 90%
of Jaxson’s voting common sto...
- ?Ace Corp. and Bate Corp. combine in a qualifying
reorganization and form Carr Corp., the only surviving corporation.
This reorganization is tax-free...
- ?In a type B reorganization, as defined by the Internal Revenue
I. Stock of the target corporation is acquired solely for the
- ?Pursuant to a plan of corporate reorganization adopted in
July 2012, Gow exchanged 500 shares of Lad Corp. common
stock that he had bought in Januar...
- ?Which one of the following is a corporate reorganization as
defined in the Internal Revenue Code?
- ?With regard to corporate reorganizations, which one of the
following statements is correct?
- ?Which one of the following is not a corporate reorganization
as defined in the Internal Revenue Code?
- ?Claudio Corporation and Stellar Corporation both report
on a calendar-year basis. Claudio merged into Stellar on June 30,
2012. Claudio had an allow...
- ?In 2009, Celia Mueller bought a $1,000 bond issued by
Disco Corporation for $1,100. Instead of paying off the bondholders
in cash, Disco issued 100 ...
- ?On April 1, 2012, in connection with a recapitalization of
Oakbrook Corporation, Mary Roberts exchanged 500 shares that
cost her $95,000 for 1,000 s...