Archives
Chapter 1 Corporations Net Operating Loss For The Year
CHAPTER 1—INCOME TAXATION OF CORPORATIONS Key 1. The proprietorship uses gross ordinary income as the basis for calculating any self-employment tax due. 2. In contrast to a regular corporation, an S corporation’s pass-through of income and deductions to its shareholders […]
Chapter 10 Partner Received Current Distribution From The
CHAPTER 10—PARTNERSHIP DISTRIBUTIONS, DISPOSITIONS OF PARTNERSHIP INTERESTS, AND PARTNERSHIP TERMINATIONS Key 1. The entity theory of partnerships predominates in the Subchapter K Code sections dealing with the tax consequences of cash and property distributions made by partnerships to partners. 2. […]
Chapter 11 Business Considered Small Business Corporation For
CHAPTER 11—S CORPORATIONS Key 1. Although an S corporation is taxed much like a partnership, it is subject to many of the C corporation rules. 2. For determining the number of shareholders in an S corporation, stock owned by a […]
Chapter 12 Germany The Us Corporation Has Us Source
CHAPTER 12—INTERNATIONAL TAXATION Key 1. The jurisdictional principle limits U.S. taxation on income to that earned only within the nation’s borders. 2. The source of employee compensation is determined by the country of residence of the employer paying the compensation. […]
Chapter 13 State Conducts Sufficient Activities Both States Create
CHAPTER 13—STATE AND LOCAL TAXATION Key 1. States generally impose a capital based franchise tax in lieu of a tax based on net income. 2. X purchases goods for resale. X will generally be liable for sales tax on such […]
Chapter 14 Federal Estate Tax Seized The State Residence
CHAPTER 14—ESTATE AND GIFT TAXATION Key 1. The Federal estate and gift taxes do not represent a major source of revenue for the Federal government. 2. In common law systems, married individuals own an equal, undivided interest in all wealth […]
Chapter 15 Income Taxation Estates And Trusts Key
CHAPTER 15—INCOME TAXATION OF ESTATES AND TRUSTS Key 1. There is no statutory period after which a decedent’s estate must be terminated. 2. Both estates and trusts may pay any income tax due for a year with a timely filed […]
Chapter 16 Based These Facts Which One The Following
CHAPTER 16—FAMILY TAX PLANNING Key 1. Grandfather GF, a single taxpayer, has current year taxable income of $300,000. His granddaughter GD, also single, has current year taxable income of $210,000. An income shift of $15,000 from GF to GD during […]
Chapter 17 The Court Accepts Only Tax Cases Taxpayers
CHAPTER 17—SOURCES AND APPLICATIONS OF FEDERAL TAX LAW Key 1. Once a tax law is enacted by Congress, any official interpretations of the law are by subsequent court decisions. 2. The House Ways and Means Committee holds hearings on proposed […]
Chapter 18 Tax Practice And Procedure Key Example
CHAPTER 18—TAX PRACTICE AND PROCEDURE Key 1. An example of involuntary taxpayer compliance is found in a sales tax system. 2. The Secretary of the Treasury has delegated the rule-making authority to the Commissioner of the IRS, subject to the […]
Chapter 2 None The Above 36 This Year And
CHAPTER 2—CORPORATE FORMATION AND CAPITAL STRUCTURE Key 1. During the year, R and S established T Corporation, which issued 100 shares of stock. R transferred land worth $9,000 (basis $8,000) to the corporation for 90 shares of stock while S […]
Chapter 3 The Basic Rules Governing Distributions Contained
CHAPTER 3—CORPORATE DISTRIBUTIONS: CASH, PROPERTY, AND STOCK DIVIDENDS Key 1. T received a distribution with respect to his stock of $50,000. The corporation had neither accumulated nor current earnings and profits. T is entitled to recover his basis before he […]
Chapter 4 Individual Owns The 100 Shares Corporation
CHAPTER 4—CORPORATE DISTRIBUTIONS: STOCK REDEMPTIONS AND PARTIAL LIQUIDATIONS Key 1. M Corporation has 100 shares of outstanding stock, all of which are owned by B. Assuming M Corporation redeems 70 of B’s shares, the redemption does not qualify for exchange […]
Chapter 5 building to its sole shareholder in complete liquidation
CHAPTER 5—COMPLETE LIQUIDATIONS Key 1. It is necessary for a corporation to dissolve before a liquidation can be completed. 2. Shareholders generally treat the amounts received in a liquidation as amounts received in full payment of their stock. TRUE 3. […]
Chapter 6 The Accumulated Earnings Credit For Manufacturing Company
CHAPTER 6—PENALTY TAXES ON CORPORATE ACCUMULATIONS Key 1. Corporations are required to compute and pay the accumulated earnings tax by the due date of the tax return. 2. The accumulated earnings tax is paid instead of the regular corporate tax […]
Chapter 7 Control The Target Corporation Must Obtained
CHAPTER 7—CORPORATE REORGANIZATIONS Key 1. It is sufficient to meet just one of the acceptable reorganizational patterns to obtain non-recognition treatment. 2. The continuity-of-interest doctrine is designed to prevent sales from being treated as nontaxable reorganizations. TRUE 3. To meet […]
Chapter 8 Which The Following Not Considered Advantage
CHAPTER 8—CONSOLIDATED TAX RETURNS Key 1. The consolidated return regulations are interpretive regulations, and therefore do not have the force and effect of statutory law. 2. An advantage of consolidated returns is that intercompany profits on the sale of goods […]
Chapter 9 Partners May Agree Specially Allocate Any
CHAPTER 9—TAXATION OF PARTNERSHIPS AND PARTNERS Key 1. Under the ‘‘check the box’’ regulations, any unincorporated business having two or more owners and that does not elect to be taxed as a corporation will be treated as a partnership. 2. […]