Day 12

Question 1

What is the basis in the property received by the Corp?

Answer 1

The GREATER of:

1. NBV PLUS gain recognized by SH

OR

2. Debt assumed by the Corporation

MCQ-06518
MCQ-06003

Question 2

The shareholder will have no gain/loss of what two conditions of IRC Section 351 are met?

Answer 2

1. 80% control of stock
2. No receipt of Boot (SH does not get boot)

MCQ-06518

Question 3

A SH will recognize gain to the lesser of:

Answer 3

1. Cash received

OR

2. Realized gain

MCQ-04758

Question 4

Realized Gain =

Answer 4

Amount Realized (FMV) less Adjusted Basis

MCQ-04758

Question 5

What will the SH do if the Liabilities assumed by the Corp excess the basis of the property contributed?

Answer 5

Recognize the excess gain

MCQ-08208

Question 6

C Corps must use accrual method of accounting when?

Answer 6

• Average gross receipts of $27 million over 3 years
• Manufacturers
• Tax shelters
• C Corps that have unrelated business income and Partnerships having a C Corp as a partner

MCQ-15652

Question 7

What method of accounting: Qualified Personal Service Corporation

Answer 7

Cash or Accrual

MCQ-15655

Question 8

When are advanced rental payments taxable?

Answer 8

In the year they are received

MCQ-02045

Question 9

Are life insurance proceeds from the death of an officer taxable to the corporation?

Answer 9

No

MCQ-02198

Question 10

When is advanced rent taxable to a corporation?

Answer 10

In the year received

MCQ-02213

Question 11

What can an illegal business selling drugs deduct?

Answer 11

ONLY The cost of merchandise

MCQ-019999

Question 12

What corporations can use the Reserve Method of deducting bad debts?

Answer 12

Small Banks and Thrift Institutions

ALL other Corps must use Direct Charge-Off Method

MCQ-02239