Corp: Income Taxes: Revenues

Question 1

Section 1231 property

Answer 1

assets in trade or bus. used for more than 1 year.

Question 2

Section 1245 property

Answer 2

depr. personal property used in business (LT assets)

Question 3

Section 1250 property

Answer 3

bus. land and most real property subject to depr.

Question 4

Capital assets include…

Answer 4

investments in stocks, bonds, and land (held in hopes of appreciation in value).

Question 5

The dividends received deduction is based on…

Answer 5

the lower of the dividend or the income.

Question 6

Are corps allowed a capital loss deduction?

Answer 6

No.

Question 7

corp. capital loss carryback/carryforward

Answer 7

A net loss is carried back 3 yrs. and carried forward 5 yrs. to reduce other capital gains.

Question 8

When a loss is carried back and forward, it is always handled as a…

Answer 8

STCL.

Question 9

In the sale of Section 1245 assets, what is reported as ordinary income?

Answer 9

1. Any gain up to the amount of the depr. is reported as ordinary income.
2. Any gain in excess of depr. is reported as a Section 1231 gain.

Question 10

For what companies can the DRD apply?

Answer 10

Only domestic U.S. companies.