Exam 15: Choice of Business Entity - Other Considerations

Under a nonqualified pension plan I.The yearly earnings on the pension plan assets are taxable income to the employee. II.An employer's contribution is taxable income to the employee at the time of the contribution.

On June 1,2013,Sutton Corporation grants Anne an option under its nonqualified stock option plan to acquire 300 shares of the company's stock for $12 per share.The fair market price of the stock on the date of grant is $18.The fair market value of the option is $4.How much must Anne report as income at the date of grant?

Cary is an employee with the Bayview Corporation.Bayview maintains a defined contribution plan for all its employees.Determine the maximum deductible contribution Bayview can make to the pension plan in each of the following situations: a.Cary's salary is $90,000. b.Cary's salary is $210,000.

To obtain the rehabilitation expenditures tax credit certain criteria must be satisfied.Which of the following are correct statements about the credit? I.Rehabilitation of business-use,investment-use,and personal-use residential real estate that is certified as historic qualifies for the historic structures rehabilitation credit. II.The rehabilitation work cannot remove more than 25% of the internal walls and framework.

Which of the following statements are correct concerning the general business credit? I.The general business tax credit only applies to an individual or corporation with a tax liability in excess of $100,000. II.The general business credit only applies to an individual or corporation that has a tax credit carryover or can claim more than one general business credit during the year.

In 2013,Billie decides to purchase a house by withdrawing $15,000 from his IRA.Brandan qualifies as a first-time home- buyer.The $15,000 consists of $12,600 in nondeductible contributions and $2,400 in income earned on the plan's assets.Billie will have to pay an early withdrawal penalty of

A taxpayer must begin withdrawals from any type of retirement plan (except a Roth IRA)no later than April 1 of the tax year after the taxpayer reaches age 70¹/₂ or,if later,the year they retire.