Mod 38 Wrong Answers Flashcards
For a corporation to be exempt from AMT in 2nd year it’s…
First year’s gross receipts must be $5 million or less
For a corporation to be exempt from AMT in its 3rd year it’s…
Average gross receipts must be $7.5 or less for years 1 and 2
What is the portion of dividends received that is included in taxable income when a corporation is computing its maximum allowable deduction for charitable contributions?
Full amount of dividends received is included
In determining the NOL for 2013, given that deductions in the tax return exceed gross income, the dividends received deduction will be…
Fully allowed (no change necessary)
In determining the NOL for 2013, given that deductions in the tax return exceed gross income, the NOL deduction carryover from 2012 will…
Not be allowed and must be subtracted from the excess deductions
To reconcile book income to taxable income, interest paid on loan to purchase municipal bonds is…2
1 not deductible on the tax return
2 must be added back to arrive at taxable income
Schedule M-1 reconciles to taxable income before…2
1 dividends received deduction
2 NOL deduction
Dividends received deduction will not be reconciling item on…
Schedule M-1
On Schedule M-1, the $2,000 of interest expense incurred to carry municipal bonds is…2
1 not deductible
2 must be added back to book income
For a parent to qualify for filing of consolidated returns, at least what % of voting stock and total stock must the parent own of the sub?
80% voting
80% total
The election to file consolidated returns is limited to…
Affiliated corporations
Affiliated corporations are parent subsidiary corporations that are connected through stock ownership wherein at least 80% combined voting power and value all of stock is directly owned by…
Other includible corporations
If accumulated earnings is -$50,000 as of December 31, 2012. And current earnings for 2013 is $5,000, with a $15,000 cash distribution made to shareholders. What amount is taxable to shareholders as a dividend?
$5,000
Distributions of property to shareholders reduce E&P by the greater of…2
1 property’s adjusted basis or
2 FMV at date of distribution
What affect does gain recognized have on E&P?
Increases E&P
When a corporation distributes a liability to a shareholder, what affect does it have on E&P?
Increases E&P
General expenses incurred in the complete liquidation and dissolution of a corporation are…2
1 deductible by corporation as
2 ordinary and necessary business expenses
General expenses in a complete liquidation of a corporation include…3
1 filing fees
2 professional fees
3 other liquidation expenditures
When a parent corporation liquidated its 80% or more owned subsidiary, the parent corporation as a stockholder will ordinarily…
Not recognize gain or loss on receipt of liquidating distributions
From its sub
No gain or loss will be recognized by a parent corp on receipt of property in…
Complete liquidation of 80% owned sub
Adjustments which can be deducted from taxable income to arrive at corporation’s undistributed personal holding company income include…
Deduction for net long term capital gain which federal taxes can
Be subtracted from
Maximum amount of taxable income that would be exposed to Accumulated Earnings Tax calculation
Taxable income 2014 - income tax 2014 - minimum AEC
PHC tax should be…
Self-assessed
PGC tax should be self assessed by filing a separate…
Form 1120-PH
