ACT_5744_web_spring_09_final_to_post[1]

ACT_5744_web_spring_09_final_to_post[1] - ,FINAL EXAM ACT...

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,FINAL EXAM ACT 5744 Spring 2009 _______________________ Professor Smith Student’s Name The answers to the exam are due for submission to the assignment dropbox no later than 11 p.m. on Sunday, June 14. The answers should be written on a separate answer sheet rather than submitting the entire exam. Please do not use a spreadsheet. The final exam consists of forty questions worth 2.5 points each. 1. Which, if either, of the following statements is or are true? I. A partner never realizes any gain on the contribution of property to the partnership in exchange for a partnership interest just as the partnership does not recognize any gain on the contribution. II A partner increases the basis of his or her partnership interest for his or her share of partnership tax-exempt income and decreases the basis of his or her partnership interest for his or her share of partnership capital losses. a. I only. b. II only. c. both I and II. d. neither I nor II. Answer: _______ 2. Which expense, both incurred and paid in 2008, can be claimed as an itemized deduction subject to the 2% of adjusted gross income floor. a. Employee’s unreimbursed business car expense. – page 946 (F. Misc. Deductions) b. One-half of the self-employment tax. c. Employee’s unreimbursed moving expense. d. Self-employed health insurance. Answer:_______ 3. Under the constructive ownership rules (of section 318 of the Code), a grandparent is considered as owning the stock owned by his or her grandchild, and a grandchild is considered as owning the stock owned by his or her grandparent. a. True. b. True, provided that either the grandparent or the grandchild owns more than 50% of the voting power of the corporation.
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True, provided that an election to be counted as one shareholder is filed with the IRS. d. False. Answer: _______ 4. The XYZ Corporation has $100,000 in earnings and profits prior to any distributions, and it distributes to its shareholders a total of $30,000 in cash plus property that has a fair market value of $80,000 and a basis of $60,000. How much is the total dividend income received by the shareholders from The XYZ Corporation? a. $50,000. b. $100,000. c. $90,000. d. $30,000. e. $110,000. Answer: ______ 5. Don owns 20% of a family-owned corporation and his wife owns 10%. His son and daughter-in-law own 5% each. Don's father owns 10% and his grandfather owns 15%. His sister owns 10% and his grandson owns 5%. Don also owns 50% interest in a partnership which owns 20% of the family-owned corporation. How much stock is Don considered to own directly and indirectly in the family-owned corporation under the rules of Code section 318? a. 60%. b. 100%. c. 70%. d. 75%. e. 55%. Answer: _______ 6. The XYZ Corporation has $200,000 in earnings and profits prior to any distributions, and it distributes to its shareholders a total of $60,000 in cash plus property that has a fair market value of $160,000 and a basis of $120,000. How much is the distribution to the shareholders from The XYZ Corporation? a.
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This note was uploaded on 12/06/2009 for the course ACCT REG 5744 taught by Professor Smith during the Spring '09 term at Nova Southeastern University.

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ACT_5744_web_spring_09_final_to_post[1] - ,FINAL EXAM ACT...

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