Regulation 3 PassMaster Questions - Becker CPA Review,...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Becker CPA Review, PassMaster Questions Lecture: Regulation 3 1 2009 DeVry/Becker Educational Development Corp. All rights reserved. CPA PassMaster QuestionsRegulation 3 Export Date: 10/30/08 Becker CPA Review, PassMaster Questions Lecture: Regulation 3 2 2009 DeVry/Becker Educational Development Corp. All rights reserved. C Corporations, Depreciation, and MACRS CPA-01659 Type1 M/C A-D Corr Ans: B PM#1 R 3-01 1. CPA-01659 ARE Nov 95 #3 Page 19 A C corporation's net capital losses are: a. Carried forward indefinitely until fully utilized. b. Carried back 3 years and forward 5 years. c. Deductible in full from the corporation's ordinary income. d. Deductible from the corporation's ordinary income only to the extent of $3,000. CPA-01659 Explanation Choice "b" is correct. A C corporation's net capital losses are carried back 3 years and forward 5 years; they expire after 5 years. In addition, a C corporation cannot deduct net capital losses from ordinary income. Choice "a" is incorrect. A C corporation's net capital losses cannot be carried forward indefinitely. They expire after 5 years. Choices "c" and "d" are incorrect. A C corporation cannot deduct net capital losses from ordinary income. CPA-01665 Type1 M/C A-D Corr Ans: D PM#2 R 3-01 2. CPA-01665 ARE Nov 95 #7 Page 19 Baker Corp., a calendar year C corporation, realized taxable income of $36,000 from its regular business operations for calendar year 1994. In addition, Baker had the following capital gains and losses during 1994: Short-term capital gain $8,500 Short-term capital loss (4,000) Long-term capital gain 1,500 Long-term capital loss (3,500) Baker did not realize any other capital gains or losses since it began operations. What is Baker's total taxable income for 1994? a. $46,000 b. $42,000 c. $40,500 d. $38,500 CPA-01665 Explanation Choice "d" is correct. Capital losses offset capital gains. If a corporation has net capital gains, they are taxed at ordinary (corporate) income tax rates. Taxable income from business operations $36,000 Short-term capital gain $8,500 Short-term capital loss (4,000 ) $4,500 Long-term capital gain 1,500 Long-term capital loss (3,500 ) (2,000 ) Net capital gain 2,500 Taxable income $38,500 CPA-01807 Type1 M/C A-D Corr Ans: B PM#3 R 3-01 3. CPA-01807 ARE R03 #5 Page 34 At the beginning of the year, Westwind, a C corporation, had a deficit of $45,000 in accumulated earnings and profits. For the current year, Westwind reported earnings and profits of $15,000. Westwind Becker CPA Review, PassMaster Questions Lecture: Regulation 3 3 2009 DeVry/Becker Educational Development Corp. All rights reserved. distributed $12,000 during the year. What was the amount of Westwind's accumulated earnings and profits at year-end?...
View Full Document

This note was uploaded on 09/25/2011 for the course ACCOUNTING AC555ON taught by Professor Abekele during the Spring '10 term at Keller Graduate School of Management.

Page1 / 95

Regulation 3 PassMaster Questions - Becker CPA Review,...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online