Question 1

The AMT tax rate for a C corporation is greater than the regular tax rate for C corporations.

Accepted Answer

A) True 
 B)False

Question 2

Lime, Inc., has taxable income of $334,000.If Lime is a C corporation, its tax liability is $66,800.

Accepted Answer

A) True 
 B)False

Question 3

Tuan and Ella are going to establish a business.They expect the business to be very successful in the long-run, but project losses of approximately $100,000 for each of the first five years.Due to potential environmental concerns, limited liability is a requisite for the owners.Which form of business entity should they select?

Accepted Answer

A) General partnership. 
B) Limited partnership. 
C) C corporation. 
D) S corporation. 
A) General partnership. 
B) Limited partnership. 
C) C corporation. 
D) S corporation.

Question 4

A limited partnership can indirectly avoid unlimited liability of the general partner if the general partner is a corporation.

Accepted Answer

A) True 
 B)False

Question 5

List some techniques for reducing and/or avoiding double taxation by transferring funds to the shareholders that are deductible to the corporation.

Accepted Answer

Transferring funds to the shareholders t

Question 6

The tax treatment of S corporation shareholders with respect to fringe benefits is not the same as the tax treatment for C corporation shareholders, but is the same as the fringe benefit treatment for partners.

Accepted Answer

A) True 
 B)False

Question 7

Match the following statements.
-Net capital gain

Accepted Answer

A) For the corporate taxpayer, are taxed using the regular tax rates. 
B) Must be capitalized, but can be amortized over 180 months. 
C) For the corporate taxpayer, the rate is 21%. 
D) For the corporate taxpayer, cannot be deducted at all in the current tax year. 
E) For the corporate taxpayer, limited to 10% of taxable income before certain deductions. 
A) For the corporate taxpayer, are taxed using the regular tax rates. 
B) Must be capitalized, but can be amortized over 180 months. 
C) For the corporate taxpayer, the rate is 21%. 
D) For the corporate taxpayer, cannot be deducted at all in the current tax year. 
E) For the corporate taxpayer, limited to 10% of taxable income before certain deductions.

Question 8

When compared to a partnership, what additional requirement applies to keep a contribution of appreciated property to a corporation from causing recognized gain?

Accepted Answer

Section 351 applies for contributions to

Question 9

Catfish, Inc., a closely held corporation which is not a PSC, owns a 45% interest in Trout Partnership, which is classified as a passive activity.Trout's taxable loss for the current year is $250,000.During the year, Catfish receives a $60,000 cash distribution from Trout.Other relevant data for Catfish are as follows.   How much of Catfish's share of Trout's loss may it deduct in calculating its taxable income?

Accepted Answer

A) $0 
B) $20,000 
C) $45,000 
D) $112,500 
A) $0 
B) $20,000 
C) $45,000 
D) $112,500

Question 10

A limited liability company LLC) is a hybrid business form that combines the corporate characteristic of limited liability for the owners with the tax characteristics of a partnership.

Accepted Answer

A) True 
 B)False

Question 11

Mercedes owns a 30% interest in Magenta Partnership basis of $52,000) which she sells to Calvin for $65,000.Mercedes' recognized gain of $13,000 will be classified as capital gain.

Accepted Answer

A) True 
 B)False

Question 12

Match the following.
-Limited partnership

Accepted Answer

A) Contribution of appreciated property to the business entity by an owner is never subject to taxation. 
B) Realized gains on the contribution of appreciated property to the entity are not recognized by the contributor when an 80% control requirement is satisfied. 
C) Realized losses on the contribution of loss property to the entity are never recognized by the contributor. 
D) Realized losses on the contribution of loss property to the entity are recognized by the contributor unless an 80% control requirement is satisfied. 
E) Basis of ownership interest to the owner is dependent on whether gain or loss is recognized to the owner on the contribution of assets to the business entity. 
A) Contribution of appreciated property to the business entity by an owner is never subject to taxation. 
B) Realized gains on the contribution of appreciated property to the entity are not recognized by the contributor when an 80% control requirement is satisfied. 
C) Realized losses on the contribution of loss property to the entity are never recognized by the contributor. 
D) Realized losses on the contribution of loss property to the entity are recognized by the contributor unless an 80% control requirement is satisfied. 
E) Basis of ownership interest to the owner is dependent on whether gain or loss is recognized to the owner on the contribution of assets to the business entity.

Question 13

Match the following statements.
-Net capital loss

Accepted Answer

A) For the corporate taxpayer, are taxed using the regular tax rates. 
B) Must be capitalized, but can be amortized over 180 months. 
C) For the corporate taxpayer, the rate is 21%. 
D) For the corporate taxpayer, cannot be deducted at all in the current tax year. 
E) For the corporate taxpayer, limited to 10% of taxable income before certain deductions. 
A) For the corporate taxpayer, are taxed using the regular tax rates. 
B) Must be capitalized, but can be amortized over 180 months. 
C) For the corporate taxpayer, the rate is 21%. 
D) For the corporate taxpayer, cannot be deducted at all in the current tax year. 
E) For the corporate taxpayer, limited to 10% of taxable income before certain deductions.

Question 14

A corporation may alternate between S corporation and C corporation status each year, depending on which results in more tax savings.

Accepted Answer

A) True 
 B)False

Question 15

S corporations can generate an AMT adjustment known as Adjusted Current Earnings ACE).

Accepted Answer

A) True 
 B)False

Question 16

After an asset contribution by a partner to a partnership, the partner's basis for his or her ownership interest is the same as the basis of the assets contributed no liabilities are involved).

Accepted Answer

A) True 
 B)False

Question 17

List some techniques which can be used to avoid and/or reduce double taxation for a C corporation.

Accepted Answer

Techniques that can be used to avoid and

Question 18

Match the following statements.
-Sale of the corporate assets by the C corporation.

Accepted Answer

A) Transaction in this form enables double taxation to be avoided. 
B) Gain or loss is calculated separately for each asset and is subject to single taxation. 
C) Subject to double taxation. 
D) The sale is treated as the sale of a capital asset under § 741, but subject to ordinary income potential under § 751. 
E) Not subject to double taxation on the sale of corporate stock. 
A) Transaction in this form enables double taxation to be avoided. 
B) Gain or loss is calculated separately for each asset and is subject to single taxation. 
C) Subject to double taxation. 
D) The sale is treated as the sale of a capital asset under § 741, but subject to ordinary income potential under § 751. 
E) Not subject to double taxation on the sale of corporate stock.

Question 19

If an S corporation distributes appreciated property as a dividend, it must recognize gain as to the appreciation.

Accepted Answer

A) True 
 B)False

Question 20

Do the at-risk rules apply to partnerships, LLCs, and S corporations?

Accepted Answer

The statutory language of § 465 does not

The AMT tax rate for a C corporation is greater than the regular tax rate for C corporations.

Lime, Inc., has taxable income of $334,000.If Lime is a C corporation, its tax liability is $66,800.

A limited partnership can indirectly avoid unlimited liability of the general partner if the general partner is a corporation.

List some techniques for reducing and/or avoiding double taxation by transferring funds to the shareholders that are deductible to the corporation.

The tax treatment of S corporation shareholders with respect to fringe benefits is not the same as the tax treatment for C corporation shareholders, but is the same as the fringe benefit treatment for partners.

Match the following statements. -Net capital gain

When compared to a partnership, what additional requirement applies to keep a contribution of appreciated property to a corporation from causing recognized gain?

A limited liability company LLC) is a hybrid business form that combines the corporate characteristic of limited liability for the owners with the tax characteristics of a partnership.

Mercedes owns a 30% interest in Magenta Partnership basis of $52,000) which she sells to Calvin for $65,000.Mercedes' recognized gain of $13,000 will be classified as capital gain.

Match the following. -Limited partnership

Match the following statements. -Net capital loss

A corporation may alternate between S corporation and C corporation status each year, depending on which results in more tax savings.

S corporations can generate an AMT adjustment known as Adjusted Current Earnings ACE).

After an asset contribution by a partner to a partnership, the partner's basis for his or her ownership interest is the same as the basis of the assets contributed no liabilities are involved).

List some techniques which can be used to avoid and/or reduce double taxation for a C corporation.

Match the following statements. -Sale of the corporate assets by the C corporation.

If an S corporation distributes appreciated property as a dividend, it must recognize gain as to the appreciation.

Do the at-risk rules apply to partnerships, LLCs, and S corporations?

Introduction to Taxation

Working With the Tax Law

Taxes on the Financial Statements

Gross Income

Business Deductions

Losses and Loss Limitations

Property Transactions: Basis, Gain and Loss, and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Individuals As the Taxpayer

Individuals: Income, Deductions, and Credits

Individuals As Employees and Proprietors

Corporations: Organization, Capital Structure, and Operating Rules

Corporations: Earnings and Profits and Distributions

Partnerships and Limited Liability Entities

S Corporations

Multijurisdictional Taxation

Business Tax Credits and the Alternative Minimum Tax

Filters

Exam 18: Comparative Forms of Doing Business

The AMT tax rate for a C corporation is greater than the regular tax rate for C corporations.

Lime, Inc., has taxable income of $334,000.If Lime is a C corporation, its tax liability is $66,800.

A limited partnership can indirectly avoid unlimited liability of the general partner if the general partner is a corporation.

List some techniques for reducing and/or avoiding double taxation by transferring funds to the shareholders that are deductible to the corporation.

The tax treatment of S corporation shareholders with respect to fringe benefits is not the same as the tax treatment for C corporation shareholders, but is the same as the fringe benefit treatment for partners.

Match the following statements. -Net capital gain

When compared to a partnership, what additional requirement applies to keep a contribution of appreciated property to a corporation from causing recognized gain?

A limited liability company LLC) is a hybrid business form that combines the corporate characteristic of limited liability for the owners with the tax characteristics of a partnership.

Mercedes owns a 30% interest in Magenta Partnership basis of $52,000) which she sells to Calvin for $65,000.Mercedes' recognized gain of $13,000 will be classified as capital gain.

Match the following. -Limited partnership

Match the following statements. -Net capital loss

A corporation may alternate between S corporation and C corporation status each year, depending on which results in more tax savings.

S corporations can generate an AMT adjustment known as Adjusted Current Earnings ACE).

After an asset contribution by a partner to a partnership, the partner's basis for his or her ownership interest is the same as the basis of the assets contributed no liabilities are involved).

List some techniques which can be used to avoid and/or reduce double taxation for a C corporation.

Match the following statements. -Sale of the corporate assets by the C corporation.

If an S corporation distributes appreciated property as a dividend, it must recognize gain as to the appreciation.

Do the at-risk rules apply to partnerships, LLCs, and S corporations?

Introduction to Taxation

Working With the Tax Law

Taxes on the Financial Statements

Gross Income

Business Deductions

Losses and Loss Limitations

Property Transactions: Basis, Gain and Loss, and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Individuals As the Taxpayer

Individuals: Income, Deductions, and Credits

Individuals As Employees and Proprietors

Corporations: Organization, Capital Structure, and Operating Rules

Corporations: Earnings and Profits and Distributions

Partnerships and Limited Liability Entities

S Corporations

Multijurisdictional Taxation

Business Tax Credits and the Alternative Minimum Tax

Filters