REG mod 38b Flashcards
What is Section 291 related to?
Section 291 relates to the depreciation recapture of Corporate Real Estate.
What rate are a corporation’s net short-term capital gains taxed at?
Ordinary rates
What are some examples of permanent differences between GAAP financial statements and the tax return?
Interest on municipal bonds, penalties and fines, and a portion of the meals and entertainment expense
Estimated payments are required to be made if the corporation expects to have more than $______ of liability.
$500
What type of gain is recognized when a corporation distributes appreciated property?
A capital gain is recognized.
What relationship between entities must exist in order to file a consolidated tax return?
A parent – subsidiary relationship.
Note: brother / sister corporations cannot file a consolidated return
What is the definition of control for tax purposes?
Control, for tax purposes, means a person obtains at least 80% of the voting stock and 80% of the non-voting stock.
Which schedule on Form 1120 is most likely to show the permanent and temporary differences between book income and taxable income?
Schedule M-1 or Schedule M-3
What is the casualty loss floor for a corporation?
There is no casualty loss floor for a corporation. The floor only exists on individual casualty losses.
May a corporation recognize a loss when distributing property with a fair market value of less than the basis?
No losses are permitted on property distributed if the fair market value is less than the corporation’s basis.
How many years may a corporation carry back a contribution deduction in excess of the 10% limitation?
There is no carryback permitted.
How many years may a corporation carry forward a contribution deduction?
Contributions in excess of the 10% limitation may be carried forward for five years.
Describe the calculation of the gain / loss on a corporation’s treasury stock.
No gain or loss is calculated on treasury stock
A corporation that distributes property as a dividend may be required to record a gain. Under what circumstances would this occur?
A gain would be recorded if the fair value of the property distributed exceeds the basis of the property.
Which schedule on Form 1120 reconciles beginning retained earnings and ending retained earnings?
Schedule M-2
