Exam_3_practice_solutions - Tax 4001 Fall 2010 Judd Exam 3...

Info icon This preview shows pages 1–2. Sign up to view the full content.

Tax 4001 Fall 2010 Judd Exam 3 Practice Questions Solutions 1. 1. Which of the following (a-c) is not correct with respect to limited liability companies? A)An advantage of an LLC when compared to a C corporation is the ability to pass tax attributes through to the owners. B) A disadvantage of a partnership when compared with an LLC is the inability of all the owners to have limited liability. C) An LLC has greater flexibility than does an S Corporation in terms of the number of owners, type of owners, special allocation opportunities and capital structure. D)All of the above (a-c) are correct. E) None of the above (a-c) is correct. D. 2. Maize Corporation had net operating income of $450,000 during the current year. In addition, Maize owns 50% of the stock in Blue Corporation and Blue Corporation paid Maize a dividend of $150,000. Maize has no other items of income and expense for the year. Compute Maize Corporation’s taxable income. Operating Income $450,000 Dividend Income 150,000 Taxable Income b4 DRD 600,000 DRD (120,000) Taxable Income $480,000 3. Kristy and Karla are equal partners in K&K Partnership. At the beginning of the year each partner’s adjusted basis in K&K was $120,000. During the year, K&K borrowed $180,000 (recourse debt). Also, during the year, K&K had an ordinary loss of $30,000; and a Net Long Term Capital Gain of $10,000.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.
  • Spring '10
  • Goldwater,Canada,Judd,Byrd,Theniel
  • Depreciation, Corporation, Taxation in the United States, Limited Liability Company, S corporation

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern