R3 M1 - C Corporation Overview

Question 1

The dividends-received deduction (DRD) is a tax deduction that may not be taken by

Answer 1

• Personal Holding Companies (PHC)
• S Corporation
• Personal Service Corporations (PSC)

Question 2

Which of the following cannot be amortized for tax purposes?

A.	Incorporation costs.

B.	Temporary directors' fees.

C.	Stock issuance costs.

D.	Organizational meeting costs.

Answer 2

Explanation
Choice “C” is correct. All costs of issuing stock are not eligible to be deducted or amortized as an organizational expenditure or start-up cost.

Choice “A” is incorrect. All incorporation costs are eligible to be deducted or amortized as an organizational expenditure.

Choice “B” is incorrect. All temporary director fees are eligible to be deducted or amortized as a start-up cost.

Choice “D” is incorrect. All organizational meeting costs are eligible to be deducted or amortized as an organizational expenditure.

Question 3

Radon Corporation contributed $120,000 to a qualified charitable organization. Radon had taxable income before any charitable contribution deduction of $1,400,000 for the year. Also, a dividends-received deduction of $100,000 was reflected in the total amount of taxable income. Radon had carryover contributions of $25,000 from the prior year. For the current year, what is the maximum amount Radon may deduct as charitable contributions?

A.	$140,000

B.	$150,000

C.	$145,000

D.	$120,000

Answer 3