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Home work-Chapter 8.
. Assume the “current year” is calendar year 2010, unless you are provided other
Turn in one copy of your solutions at the start of class. (24 @ 4 Pts. = 96+9=105)
This homework has been updated for Spring 2011.
You should work and turn in the first 24 questions. The remainder are review questions for us to look at
before we leave the corporate tax chapters.
Brother-Sister material is not explained well in the text and instructor will fill in the missing explanation.
There is a good bit of duplication of similar questions dealing with basic concepts – gives you a good look at
the number of ways the CPA Exam can test on those basic concepts.
The outstanding stock of Corporations A, B, C and D is owned by the following unrelated individuals:
Which Corporations are members of a brother-sister controlled group under section 1563(a)(2)?
[Do not use section 1563(f)(5). May require instructor explanation in addition to PowerPoint file.]
B, C & D
[Chapter 2. Pg. 2-23, Sec. 1561(a)] Assume for purposes of this question that all of the corporations in the
preceding question are brother sister corporations.
They each had taxable income of $50,000 ($200,000 total) in the current year.
What is the total federal income tax liability for these corporations for the current year?
[Chapter 2. Pg. 2-23, Sec. 1561(a)]
Joe owns 100% of the stock of two corporations:
(1) The Furniture Place in Gastonia and
(2) The Appliance Place in Monroe.
Each corporation has taxable income of $100,000 (total of $200,000) in the current year.
How much total federal income tax is paid by these two corporations for the year?
[Pg. 8-8, Sec. 1501, 1504] See preceding question.
May these two corporations file a consolidated federal income tax return?
[Chapter 2. Pg. 2-24, Sec. 6655]
A corporation’s total federal income tax liability
after credits was $30,000 for the preceding year.
The total federal to be paid for 2010 to avoid a penalty for
underpayment of estimated tax for the current year is?
[Chapter 2. Pg. 2-24, Sec. 6081]
Compliance-return due date.
A calendar year corporation obtains an
automatic six-month extension to file its 2010 corporate income tax return. The corporation should file the return by:
March 15, 2011
April 15, 2011
September 15, 2011
October 15, 2011