FTax IRGTB ch19 p001-018

What is the maximum amount of organizational expenses

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Unformatted text preview: at may be deducted on the corporation's initial tax return? a. $250 b. $360 c. $400 d. $1,800 e. $1,975 27. A newly formed corporation elected to use a fiscal year ending June 30. On July 10, 2011 the corporation began business and incurred $8,600 of qualified organizational expenses, which were paid in July of 2012. The corporation properly elected to amortize these costs over a 180-month period. What is the amount of organization expenses that it should deduct on its cash basis tax return for the fiscal year ending June 30, 2012? a. b. c. d. e. 28. $0 $300 $573 $5,240 $8,600 Which one of the following is not an organization expense? a. b. c. d. Legal fees to draft the charter Underwriter's fees for furnishing a definite sum of money in return for a stock issue Expenses of temporary directors Fees paid to the state for incorporation 29. During its first year of operation, K Corporation had a gross profit from operations of $180,000 and deductions of $250,000 before considering its dividend income or dividends-received deduction. K received dividends of $50,000 from a taxable U.S. domestic corporation in which K owned 4.5 percent of the stock. K's ownership of the dividend-paying corporation's stock is not debt financed. What is K Corporation's net operating loss for the year? a. b. c. d. e. $20,000 $49,000 $55,000 $65,000 $70,000 19-6 Chapter 19 Corporations: Formation and Operation 30. Which one of the following is treated the same for individuals and corporations for regular Federal income tax purposes? a. b. c. d. Depreciation recapture Charitable contributions Capital losses Depreciation 31. Which one of the following statements is true for a regular corporation? a. b. c. d. e. Charitable contributions in excess of the 10 percent limitation may be carried forward indefinitely. A charitable contribution carryover is allowed as a deduction even if it increases a net operating loss. Charitable contributions in excess of the 10 percent limitation may, subject to limitations, be carried back to each of the preceding three years. Charitable contributions in excess of the 10 percent limitation may, until used up, be carried over to each of the following five years, subject to limitation in these years. Subject to the 10 percent limitation, a carryover of excess contributions is used before the contributions made in the carryover year. 32. T Corporation's taxable income is $100,000, computed by erroneously deducting the corporation's total charitable contributions of $12,000. The correct taxable income for T Corporation is a. b. c. d. e. $106,000 $103,200 $102,000 $100,800 $112,000 33. In 2011, Y Corporation's first year, the corporation had a long-term capital loss of $2,000. For the current year, 2012, the corporation has a long-term capital gain of $12,000 and a short-term capital loss of $4,000. The amount of taxable capital gain for the current year is a. b. c. d. $2,400 $3,200 $6,000 $8,000 34. Z Corporation had taxable income of $600,000 before considering the fol...
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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.

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