Exam 1 - Chapter 3 : Chapter 16: Corporate Distributions in...

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Chapter 3 : Chapter 16: Corporate Distributions in Complete liquidation - CCH Test 1 chapters 14,15,16 Time Remaining: 1. When a corporation receives property from a shareholder its basis equals that of the shareholder, increased by any gain recognized by the shareholder. (Points :1) True False 2. In a Code Sec. 351 transfer, liabilities cannot trigger gain, unless they exceed the aggregate basis of property transferred. (Points :1) True False 3. A shareholder recognizes no gain on a capital contribution to a corporation merely because he is a minority shareholder. (Points :1) True False 4. The receipt of boot in a Code Sec. 351 transfer precludes any nonrecognition treatment. (Points :1) True False
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5. A corporation's deduction for charitable contributions is limited to 50 percent of adjusted taxable income. (Points :1) True False 6. A sale of Code Sec. 1244 stock results in ordinary income if sold at a gain. (Points :1) True False 7. A corporation must make all the same adjustments as an individual when computing its net operating loss. (Points :1) True False 8. Organizational expenditures must be capitalized but may be amortized over 60 months or longer. (Points :1) True False 9. The full dividends received deduction is not permitted if the corporation has a net operating loss for the year. (Points :1) True False
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10. The corporate income tax rate is a flat 34 percent for all corporations with taxable income of $335,000 or more. (Points :1) True False 11. Current E&P is allocated to the annual distribution pro rata, accumulated E&P is allocated pro tanto. (Points :1) True False 12. John Jergen's stock basis is $3,000 and he has owned it for two years. If E&P is $4,000 and John receives a distribution of $12,000, the result is a dividend of $4,000, a return of capital of $3,000, and a long-term capital gain of $5,000. (Points :1) True False 13. When a tax-free right is received, the shareholder may be able to allocate basis to it from his stock, or it may simply have a zero basis. (Points :1) True False 14. A corporation must recognize a gain if it distributes property with a liability in excess of adjusted basis. (Points :1) True False
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15. The proceeds under a Code Sec. 303 redemption are limited to the sum of all estate, inheritance, legacy, or succession taxes imposed. (Points :1) True False 16. When comparing corporate and individual taxation the following statements are true, except: (Points :1) Individuals have exemptions and a standard deduction, corporations do not. Both types of taxpayers have percentage limitations on the charitable contribution deduction, coupled with a carryover of the excess contribution. All taxpayers may carry net operating losses back three years, forward 15. Both corporate and individual taxpayers may have a long-term capital loss
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Exam 1 - Chapter 3 : Chapter 16: Corporate Distributions in...

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