FTax IRGTB ch19 p001-018

Z corporation had taxable income of 600000 before

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Unformatted text preview: lowing: Gain on the sale of equipment Loss on the sale of equipment Gain on the sale of land used in the business Loss on the sale of investment held five months Loss on the sale of investment held two years $ 15,000 (29,000) 70,000 (5,000) (18,000) The equipment sold at a gain cost $150,000, and $90,000 of depreciation had been claimed. What is Z Corporation's taxable income? a. b. c. d. e. $618,000 $633,000 $647,000 $671,000 $685,000 Test Bank 19-7 35. D Corporation sells residential rental property for $1 million. The property had been purchased for $800,000. D Corporation claimed $240,000 of ACRS depreciation. Straight-line depreciation would have been $130,000. The amount of 1231 gain to be reported on the sale is a. b. c. d. $200,000 $304,000 $330,000 $440,000 36. Z Corporation has adopted the calendar year for filing its tax return. Z Corporation's calendar year taxable income is $2 million. The corporation's Federal income tax liability before credits and prepayments is a. b. c. d. e. $769,460 $899,740 $920,000 $1,020,000 None of the above 37. A regular corporation and a personal service corporation each have taxable income of $20,000 for the calendar year. Ignoring the alternative minimum tax provisions, which one of the following statements is true regarding the Federal income tax liabilities of these two corporations? a. b. c. d. e. Both corporations will have the same tax liability before credits or prepayments. The regular corporation will have a slightly lower tax liability before credits or prepayments. The personal service corporation will have a slightly lower tax liability before credits or prepayments. The regular corporation's tax liability will be exactly $2,000 less than the tax liability of the personal service corporation. The regular corporation's tax liability will be less than half that of the personal service corporation. 38. A personal service corporation a. b. c. d. May rent but not own capital assets Has a flat tax rate of 35 percent on its taxable income Is denied nonrecognition for its shareholders in a transaction otherwise qualifying under 351 May be engaged exclusively in the active conduct of a beauty salon 39. Which one of the following is not a normal corporate tax preference? a. b. c. d. Accelerated depreciation on real property Accelerated depreciation on leased personal property Depletion Capital gains 40. A calendar year corporation is required to file its tax return by which of the following dates after the close of its tax year? a. b. c. d. March 15 April 15 August 15 September 15 41. Which one of the following does not appear on a corporate tax Form 1120? a. b. c. d. A balance sheet Schedule of capital gains and losses Schedule of cost of goods sold Schedule of officer's compensation 19-8 Chapter 19 Corporations: Formation and Operation 42. F and G formed a corporation on March 1 this year. F transferred equipment worth $40,000 (basis $15,000) in exchange for 40 shares of stock and performed services worth $10,000 in exchange for 10 shares of stock. In exchange for 50 shares of stock, G contributed land worth $70,000 (basis $9,000) subject to a...
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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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