Corporate Taxation Exam Bank
Course Introduction
Corporate Taxation provides an in-depth exploration of the federal income tax laws and principles that govern corporations and their shareholders. The course examines the formation, operation, and dissolution of corporations, focusing on tax implications for both the corporation and its owners. Key topics include taxable income computation, distributions, redemptions, liquidations, corporate reorganizations, and the treatment of affiliated groups. Students also analyze current developments in corporate tax policy, planning strategies, and compliance issues, equipping them with a comprehensive understanding of how taxation shapes business decisions and corporate structures.
Recommended Textbook
Concepts in Federal Taxation 2017 24th Edition by
Available Study Resources on Quizplus
16 Chapters
2073 Verified Questions
2073 Flashcards
Source URL: https://quizplus.com/study-set/3583
Kevin E. Murphy
Page 2
Chapter 1: Federal Income Taxation-An Overview
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/71134
Sample Questions
Q1) The calculation of an individual's income tax includes certain deductions for adjusted gross income.The following are examples of this class of deductions:
I.Trade or business expenses
II.Rental expenses
III.Interest on student loans
IV.Investment interest
A)Statements I and II are correct.
B)Statements I, II, and III are correct.
C)Only statement I is correct.
D)Only statement III is correct.
E)Statements I, II, III, and IV are correct.
Answer: B
Q2) Which of the following payments would not be considered a tax?
A)An assessment based on the selling price of the vehicle.
B)A local assessment for new sewers based on the amount of water used.
C)A local assessment for schools based on the value of the taxpayer's property.
D)A surcharge based upon the amount of income tax already calculated.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Income Tax Concepts
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/71135
Sample Questions
Q1) Tim purchased State of Idaho general-purpose bonds at a cost of $3,400 in 2014.He receives $170 interest on the bonds in 2014,2015,and 2016.In 2016,he sells the bonds for $3,800.Tim excludes the bond interest,but must include a $400 capital gain in his 2016 gross income.Which of the following Concepts,Constructs,and/or Doctrines help in forming the basis for this treatment?
I.Constructive Receipt Doctrine.
II.All-inclusive Income Concept.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Answer: B
Q2) An asset's adjusted basis is the amount of unrecovered investment after considering any increases and decreases in the original purchase price.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Income Sources
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/71136
Sample Questions
Q1) Income realization may occur as a result of
I.Relief from a liability.
II.Exchange of property.
III.Payment of the taxpayer's indebtedness by another.
IV.A barter transaction where only goods and services are exchanged.
A)Only statement I is correct.
B)Only statement II is correct.
C)Only statements I and IV are correct.
D)Only statements I, II, and IV are correct.
E)Statements I, II, III, and IV are all correct.
Answer: E
Q2) For any unrecovered portion of an annuity investment,the taxpayer is allowed a deduction in the year of death.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Income Exclusions
Available Study Resources on Quizplus for this Chatper
160 Verified Questions
160 Flashcards
Source URL: https://quizplus.com/quiz/71137
Sample Questions
Q1) Milton is experiencing cash flow problems during the current year.Rather than foreclose on the $120,000 mortgage loan on his principal residence,his bank agrees to reduce the debt to $90,000.Prior to the debt reduction,Milton's total assets were $400,000 and his total liabilities were $390,000.How much income must Milton recognize from the reduction of his bank loan?
A)- 0 -
B)$10,000
C)$20,000
D)$30,000
Q2) Julia spends her summers away from college as a forest ranger in a remote area near Mt.McKinley,Alaska.She lives in a remote dormitory where she also receives free meals.The dormitory's location permits rangers to be on call in case of an emergency.
I.The value of the lodging is excluded from Julia's gross income.
II.The value of the meals is excluded from Julia's gross income.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Introduction to Business Expenses
Available Study Resources on Quizplus for this Chatper
166 Verified Questions
166 Flashcards
Source URL: https://quizplus.com/quiz/71138
Sample Questions
Q1) Davis owns and operates a convenience store on the north side of the city.He has always wanted to operate a sports bar.When he hears of a new shopping center development in the south part of the city,he contacts the developer and begins negotiations to open his dream enterprise.
I.If negotiations are successful and Davis incurs $40,000 in start-up costs to open his new business,he can deduct up to $5,000 of the start-up costs and must capitalize the costs of investigation and start-up exceeding $5,000.
II.If Davis decides not to open his bar and restaurant,the investigation expenses are fully deductible.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q2) Andy lives in New York and rents his house for two weeks during the U.S.Open Tennis tournament for $3,500.He must include the rent in his income.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Business Expenses
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/71139
Sample Questions
Q1) Victor is a sales representative for Valley Winery.Victor receives a monthly travel allowance from Valley to cover his travel costs (transportation,food,lodging,entertainment,etc.).If Victor is required to account to Valley for the use of the travel advance and to return any excess travel advance i.To the extent Victor is reimbursed for less than his costs,part of his expenses are deducted for AGI and part are deducted from AGI.II.Victor must include the travel allowance in his gross income.His actual costs are deductible from AGI,subject to all applicable limits on such deductions.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q2) 50% of the self-employment tax is deductible as a miscellaneous itemized deduction from adjusted gross income.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Losses-Deductions and Limitations
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/71140
Sample Questions
Q1) Which of the following events is a "casualty" loss?
I.Diamonds stolen by thief,reported to police
II.Florida orange trees killed by a freeze.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q2) Portfolio income consists of unearned income from dividends,interest,royalties,annuities,and other assets held as investments.
A)True
B)False
Q3) A closely held corporation cannot offset net passive losses against income of the business.
A)True
B)False
Q4) If a corporation incurs a net operating loss,what would cause it to elect to carry the loss forward and forsake the carryback? Explain.
Q5) Why did Congress enact the at-risk rules?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Taxation of Individuals
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/71141
Sample Questions
Q1) Filing status
A)Unmarried without dependents.
B)Generally used when financial disagreement exists.
C)Unmarried and provides a household for a dependent.
D)Use the same tax rate schedule as married, filing jointly.
E)Determines which tax rate schedule and standard deduction amount is applicable.
Q2) Certain interest expense can be carried forward if not deductible in the current year.Which of the following types of interest can be carried forward and deducted in a future year?
A)Credit card interest.
B)Personal car loan interest.
C)Interest on a loan to buy common stock.
D)Home equity loan interest.
Q3) Any charitable contributions made in excess of the individual's limitation on charitable contributions can be carried forward seven years.
A)True
B)False
Q4) Explain the support test and the gross income test to be a qualifying relative.
Q5) Self-employed sports agent pays $6,000 of self-employment tax.Amount: $3,000
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Acquisitions of Property
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/71142
Sample Questions
Q1) On June 10,2015,Wilhelm receives a gift of gold coins with a fair market value of $10,000.The gold coins had an adjusted basis of $12,000 to the donor.Wilhelm sells the gold coins August 1,2016,for $8,000.What is the amount of the recognized gain or loss on the sale?
A)$- 0 -
B)$2,000 loss
C)$3,000 loss
D)$4,000 loss
E)$5,000 loss
Q2) Perry inherits stock from his Aunt Margaret that had a basis of $40,000 to Margaret and a fair market value of $54,000 on May 20,2016,the date of her death.Paul sells the stock on June 21,2016 for $65,000.What is the amount and character of the gain or loss on the sale?
Q3) The split basis rule for determining the basis of gifts allows for one basis for determining losses and another for calculation of gains.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Cost Recovery on Property: Depreciation, depletion,
and Amortization
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/71143
Sample Questions
Q1) Why might a taxpayer elect to depreciate assets using the Alternative Depreciation System (ADS)?
I.The taxpayer desires rapid write off of assets.
II.The taxpayer may be close to being subject to the alternative minimum tax.
III.The taxpayer is experiencing a low income time period.
A)Statements I and III are correct.
B)Only statement I is correct.
C)Statements II and III are correct.
D)Statements I and II are correct.
E)Statements I, II, and III are correct.
Q2) On August 3,2016,Yang purchases office furniture (7-year property)costing $21,000 for use in her business.She does not wish to use the Section 179 election and makes the election to use the straight-line method over the MACRS recovery period.What is Yang's 2016 cost recovery deduction?
A)$ 500
B)$ 1,500
C)$ 3,000
D)$20,000
E)$21,000
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Property Dispositions
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/71144
Sample Questions
Q1) Drew traded his office copier in for a new one.The old copier had an adjusted basis of $400.The new copier cost $1,350,and he was given a trade-in allowance of $500.
I.The amount realized is $400.
II.Drew has a realized gain of $100.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q2) If an individual sells depreciable real estate at a gain
I.the entire gain is taxed at a maximum rate of 15%.
II.the gain due to depreciation is taxed as a long-term capital gain.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q3) Discuss the general differences between Section 1245 and Section 1250 recapture provisions.
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Non-Recognition Transactions
Available Study Resources on Quizplus for this Chatper
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/71145
Sample Questions
Q1) Grant exchanges an old pizza oven from his business for a new oven.In addition to the old oven,which has a basis of $10,000,Grant pays $4,000 cash and takes out a loan on the new oven for $6,000.The new oven is valued at $22,000.What is Grant's recognized gain or loss due on this transaction?
A)$- 0 -
B)$2,000
C)$12,000
D)$16,000
E)$22,000
Q2) An involuntary conversion occurs whenever a loss (but not a gain)is realized from a transaction that occurs against the taxpayer's will.
A)True
B)False
Q3) Discuss the type of property that is qualified replacement property for involuntary conversion provisions for gain deferrals.
Q4) The recognition of a loss realized on an involuntary conversion is mandatory.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Choice of Business Entity-General Tax and
Nontax
Factorsformation
Available Study Resources on Quizplus for this Chatper
101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/71146
Sample
Questions
Q1) Maria owns 30% of the stock of Marshmallow Inc.,an electing S corporation.Marshmallow reports taxable income of $100,000 and pays $80,000 in dividends to shareholders.What is Maria's income from Marshmallow?
A)$-0-
B)$24,000
C)$30,000
D)$54,000
E)$80,000
Q2) Nick and Rodrigo form the NRC Partnership by combining the assets of their respective businesses.Nick contributes $10,000 and assets worth $90,000 (adjusted basis of $60,000)for a 1/3 interest.Rodrigo contributes $90,000 and assets worth $270,000 (adjusted basis of $150,000)for a 2/3 interest.NRC also assumes $60,000 of debt on Rodrigo's assets.What is Nick's basis in his partnership interest?
A)$70,000
B)$90,000
C)$100,000
D)$120,000
E)$160,000
Q3) Discuss the characteristics of a personal service corporation (PSC).
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Choice of Business Entity-Operations and Distributions
Available Study Resources on Quizplus for this Chatper
97 Verified Questions
97 Flashcards
Source URL: https://quizplus.com/quiz/71147
Sample Questions
Q1) During the current year,Mars Corporation receives dividend income of $20,000 from an 85%-owned domestic corporation.What is Mars' maximum allowable dividend-received deduction for the current year?
A)$- 0 -
B)$14,000
C)$16,000
D)$18,000
E)$20,000
Q2) Sensor Corporation was formed and began operations in 2014.For that year,it had operating income of $50,000,long-term capital gains of $25,000 and short-term capital losses of $10,000.In 2015,the corporation had $5,000 of net long-term capital losses,and in 2016 the corporation had $20,000 of net long-term capital losses.How much capital loss is available to carry forward to 2017?
A)$- 0 -
B)$10,000
C)$15,000
D)$20,000
E)$25,000
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Choice of Business Entity-Other Considerations
Available Study Resources on Quizplus for this Chatper
101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/71148
Sample Questions
Q1) When calculating AMTI,individual taxpayers must add back the following:
I.Miscellaneous itemized deductions subject to the 2% limitation.
II.Personal exemption amounts.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q2) Amanda is an employee of the Kiwi Corporation with a yearly salary of $80,000.The company maintains a noncontributory profit-sharing plan.During the year the company contributes $24,000 to the plan on her behalf in recognition of her outstanding work.The Kiwi Corporation is subject to an excess contribution penalty of
A)$-0-
B)$400
C)$1,000
D)$2,000
E)$3,750
Q3) Any structure over 100 years old is eligible for the rehabilitation tax credit.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Tax Research
Available Study Resources on Quizplus for this Chatper
92 Verified Questions
92 Flashcards
Source URL: https://quizplus.com/quiz/71149
Sample Questions
Q1) All of the following citations are to trial court decisions except:
A)George E. Jones, 21 B.T.A. 431 (1940)
B)Harper Smith, 577 F.2d 212 (CA-3, 1978)
C)George F. Dowell v. U.S. 370 F.Supp. 69 (D. Ct. Tx. 1974)
D)Raymond R. Windle, 65 T.C. 694 (1976)
E)Jerome Prizant, 30 TCM 817 (1971)
Q2) Which of the following statements concerning the Internal Revenue Code is true?
I.The most current tax laws may be found in the Internal Revenue Code of 2016.
II.A tax treaty may override the Code.
III.The most common references to a particular part of the Code are to a section.
IV.The Internal Revenue Code is considered a secondary source of tax law.
A)Statements I and II are correct.
B)Statements I and III are correct.
C)Statements II and III are correct.
D)Statements II and IV are correct.
E)Only II is correct.
Q3) Describe the steps of the tax research process.
To view all questions and flashcards with answers, click on the resource link above. Page 18