Day 18

Question 1

In year 1 the Corp has an NOL, what method can the Corp use to estimate their tax liability in year 2?

Answer 1

Annualized Method

NOTE: Cannot use 100% of preceding year bc they did not have income

MCQ-02119

Question 2

When will no penalty be impressed for underpayment of tax liability for a Corp?

Answer 2

When tax liability is less than $500

MCQ-02244

Question 3

Define general business credit:

Answer 3

Combines several non-refundable tax credits and provides rules for their absorption against the taxpayer’s liability

MCQ-02117

Question 4

What is the Accumulated Earnings Tax?

Answer 4

Regular C Corp is entitled to $250,000 of lifetime accumulated earnings

Personal Holding company is entitled to $150,000 of lifetime accumulated earnings

MCQ-02160

Question 5

What types of income is included in a Personal Holding Company?

Answer 5

• Interest
• Dividends
• Income from investments, stocks and securities

MCQ-02090

Question 6

How do you qualify as a Personal Holding Company?

Answer 6

1. A Corp is owned by five or fewer people that own 50% or more of the Corp at anytime in the last half of the tax year
2. At least 60% of adjusted ordinary gross income is derived from investments

MCQ-02207

Question 7

When computing a personal Holding company’s undistributed personal Holding company income what deductions are allowed?

Answer 7

Federal income tax expenses = allowed

MCQ-02054

Question 8

MCQ-06007

Question 9

On consolidated tax returns what is eliminated?

Answer 9

Intercompany gains

MCQ-12524

Question 10

Net Section 1231 losses are _______?

Answer 10

Deducted as Ordinary losses (deduct against ordinary income)

MCQ-11083

Question 11

NOL rules for tax years after 12/31/17 and before 01/01/21

Answer 11

Carry back 5 years and carry forward indefinitely

MCQ-12704

Question 12

NOL loss limitation

Answer 12

Carry back is limited to taxable income

MCQ-14932