Solutions to Corporation CPA Test4.docx - Test 1 Mr A owned...

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Test 1. Mr. A owned 75% of the voting stock and 85% of the nonvoting stock of Corporation Y. Mr. A transferred property with a fair market value of $90,000 and an adjusted basis of $70,000 to Y for an additional 5% of the voting stock and 5% of the nonvoting stock. What is the amount
2. The following information pertains to Wald Corp.’s operations for the year ended December 31, 2019: $36,600 3. Jones incorporated a sole proprietorship by exchanging all the proprietorship’s assets for the stock of Nu Co., a new corporation. To qualify for tax-free incorporation, Jones must be in control of Nu immediately after the exchange. What percentage of Nu’s stock must Jones own to qualify as “control” for this purpose?
4. How does the United States treat income earned in multiple foreign tax jurisdictions for
5. Diane, the sole shareholder of Check Corporation’s stock, owns 500 shares, which she purchased in 2008. Diane’s basis in Check’s stock is $20,000. During 2019, Check, which had earnings and profits of $50,000, redeemed 250 shares of Diane’s stock for $12,000. What are
6. For Year 2, Quest Corp., an accrual-basis, calendar-year C corporation, had an $8,000 unexpired charitable contribution carryover from Year 1. Quest’s Year 2 taxable income before the deduction for charitable contributions was $200,000. On December 12, Year 2, Quest’s board of directors authorized a $15,000 cash contribution to a qualified charity, which was made on January 6, Year 3. What is the maximum allowable deduction that Quest may take as a charitable contribution on its Year 2 income tax return?
7. For a domestic corporation in the current year, the general business tax credit is limited to the lesser of its net income tax, with certain adjustments for other credits, over 25% of its net regular tax liability for the year that exceeds $25,000. How does a controlled group of corporations treat the $25,000?
8. Which one of the following is not a corporate reorganization as defined in the Internal
9. Pursuant to a plan of corporate reorganization adopted in Year 1, Myra Eber exchanged 1,000 shares of Faro Corporation common stock that she had purchased for $75,000 for 1,800 shares of Judd Corporation common stock having a fair market value of $86,000. As a result of this exchange, Eber’s recognized gain and her basis in the Judd stock should be:
14. Zeb, an individual shareholder, owned 25% of Towne Corporation stock. Pursuant to a series of stock redemptions, Towne redeemed 10% of the shares of stock Zeb owned in exchange for land having a fair market value of $30,000 and an adjusted basis of $10,000. Zeb’s basis for all of his Towne stock was $200,000. Zeb reported the redemption transaction as if it

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