C11-Chp-00-Tst-3-Exm-Prb-2011-Nite

C11-Chp-00-Tst-3-Exm-Prb-2011-Nite -...

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11520f7dd41b55ddc991a32a6f7f5b51150d6d9c.doc. Page 1 of 4 Accounting 6120. Corporate Taxation – Examination no. 3-Night Class Spring, 2011. The University of North Carolina at Charlotte Name________________________________________________ Instructions : You may use your code and regs book during the test. You may also use up to 4 pages of notes-front and back, as well as any outlines of code provided by the instructor in class or on the web page. You may not use your regular tax textbook when answering questions on this test. Avoid all appearances of impropriety. 1 Consolidated returns may be filed by: a. Either by parent-subsidiary corporations or by brother-sister corporations. b. Only by corporations that formally request advance permission from the IRS. c. Two corporations when the first one owns: stock having at least 51% of the voting power of the second corporation and stock having at least 51% of the value all stock of the second corporation. d. Two corporations when the first one owns: stock having at least 80% of the voting power of the second corporation and stock having at least 80% of the value all stock of the second corporation. 2 In 2010, Parent bought all of stock of Local Corp., which continued to operate as a subsidiary of Parent. They have provided the following partially completed worksheet for computation of consolidated taxable income. The two corporations have not had capital gains or losses or Section 1231 gains or losses before 2011. Year - 2011 Parent Local Corp. Consolidated Gross income from operations 300,000 200,000 Interest income 17,000 MACRS depreciation (22,000) (5,000) Other deductible operating expenses (200,000) (203,000) Separate taxable income 95,000 (8,000) Items not included above Capital loss on sale of IBM stock (70,000) Section 1231 loss – sale of land used in business (80,000) Consolidated taxable income What is consolidated taxable income for 2011? a. $77,000 b. $87,000 c. $95,000 d. $165,000 e. $7,000 3 Charlotte Corp. and Concord Corp. file consolidated tax returns. In January 2010, Charlotte sold land, with a basis of $60,000 and a fair value of $100,000, to Concord for $100,000. Concord sold the land in December 2011 for $150,000. In the consolidated group’s 2011 and 2010 tax returns, what amount of gain should be reported for these transactions in the consolidated return? 2011 2010 a. $50,000 $40,000 b. $90,000 $0 c. $40,000 $50,000 d. $45,000 $45,000
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11520f7dd41b55ddc991a32a6f7f5b51150d6d9c.doc. Page 2 of 4 4 Boone Corp. had net taxable income of $300,000 from its own operations. Boone owns 60% of Hickory Corp.'s outstanding capital stock. Hickory's capital stock consists of 50,000 shares of common stock issued and outstanding. Hickory's net income was $200,000 for the current year. During the current year, Hickory declared and paid dividends of $80,000.
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This note was uploaded on 03/09/2012 for the course ACCT 6120 taught by Professor Godfrey,h during the Spring '08 term at UNC Charlotte.

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C11-Chp-00-Tst-3-Exm-Prb-2011-Nite -...

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