Entity Taxation

Question 1

Accrual basis

Answer 1

Is required if inventory is greater than #30 mil of average annual gross receipts for 3 year period

Question 2

Charitable Contributions

Answer 2

10% of Adju taxable income limitation
Any disallowed may be carried back for 5 years
Accruals must be paid out within 3.5 months

Question 3

Business meals

Answer 3

up to 50%

Question 4

Tax Credits

Answer 4

Investment credit
Work opportunity credit
Alternative fuel credit
R & D
Low income housing
small employee pension startup

Question 5

1120 extension

Answer 5

7004

Question 6

S-Corp

Answer 6

All shareholders must consent using form 2553

Question 7

S-Corp shareholder basis

Answer 7

B - Begin Balance (Initial Contribution)
A - Additional Contributions & Income
S - Subtract Distributions & losses
E - Ending Balance

Question 8

Partnerships shareholder basis

Answer 8

B - Beg Capital Acct (Contributions)
A - All income
S - Subtract losses & deductions, distributions
E - Ending capital account
+ Partnership liability

Question 9

Partnership losses

Answer 9

can only flow thru to partners individual tax return to the extent of the partner’s tax basis in their partnership interest

Question 10

Dividends Received deduction

Answer 10

0%-20% ownership - 50% deduction
20%-80% - 65%
80%-100% - 100%

Question 11

Carrybacks & Carryforward Corporations

Answer 11

0 carryback
Carryforward indefinitely with 80% limitation of taxable income

Question 12

Book to Tax Reconciliation

Answer 12

Not required to file, L, M-1, or M-2 if their total assets and their total receipts are less than $250,000

Question 13

M-1

Answer 13

$10 million to $50 million in assets

Question 14

M-2

Answer 14

Also must reconcile Retained earnings

Question 15

M-3

Answer 15

more than $50 million in assets