FTax IRGTB ch19 p001-018

Form 1120 for a calendar year corporation is due

Info iconThis preview shows page 1. Sign up to view the full content.

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

Unformatted text preview: ar corporation is due April 15. 19-3 19-4 Chapter 19 Corporations: Formation and Operation 14. An individual who transfers property in return for all of the common stock of a corporation will not recognize gain under 351, even though he acquires no preferred stock, which is also outstanding to the corporation. An individual receiving both stock and short-term notes for appreciated property has no recognized gain because of 351. Section 351 encompasses nonsimultaneous transfers provided they are part of one transaction. Assumption of all debt by a corporation is included under the nonrecognition provision of 351. A corporation does not recognize gain on the transfer of its own stock in exchange for money or other property. In any 351 transfer, the corporation's basis in the property is the same as the transferor's basis. A corporation does not recognize income as the result of a contribution to capital, even though it does not issue any stock. 15. 16. 17. 18. 19. 20. Multiple Choice 21. Which one of the following is not a corporate characteristic provided in the Regulations? a. b. c. d. Profit motive Unlimited liability Continuity of life Centralized management 22. Which one of the following is a false statement concerning corporations and deductions? a. b. c. d. Corporations cannot have nonbusiness bad debts. Corporations have no deductions from AGI. Corporations have itemized deductions. Corporations do not have to reduce their casualty losses by 10 percent of AGI. 23. R Corporation had gross income of $200,000 including $100,000 of dividends received from a lessthan-20-percent-owned taxable domestic corporation. R had deductible business expense of $110,000 before considering its dividends-received deduction. What is R Corporation's dividendsreceived deduction for, assuming no restrictions other than the taxable income limitation may apply? a. b. c. d. e. $63,000 $68,000 $70,000 $80,000 $100,000 24. For its taxable year, T Corporation has the following taxable income and deductible expenses Gross income from operations Deductible expenses of operations Dividends received $205,000 218,000 35,000 The dividends were received from a taxable domestic corporation in which T owns 15 percent of the stock (not debt-financed). What is T Corporation's dividends-received deduction? a. b. c. d. e. $0 $15,540 $21,000 $24,500 $35,000 Test Bank 19-5 25. F Corporation has an operating loss of $40,000 before dividend income plus gross qualifying dividends from unrelated corporations of $100,000. F is entitled to a dividend received deduction of a. b. c. d. $0 $42,000 $70,000 $100,000 26. New Corporation was organized and began doing active business on January 7 of the current year. New incurred the following expenses in connection with opening the business: Legal fees for drafting the charter and bylaws Legal fees for transferring the ownership titles of assets from shareholders to the corporation State incorporation fees Printing cost for stock certificates Fees paid to temporary directors for the first two organization meetings Accounting fees to set up initial recordkeeping system Total $ ,750 , ,,,,,100 ,250 ,175 ,300 ,400 $1,975 For tax purposes, New Corporation uses the accrual basis and adopts a calendar year. What is the maximum amount of organizational expenses th...
View Full Document

This note was uploaded on 02/05/2012 for the course ACCT 112 taught by Professor Smith during the Spring '11 term at Adrian College.

Ask a homework question - tutors are online