chapter 3

chapter 3 - A regular corporation must use a calendar year...

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A regular corporation must use a calendar year as its tax year unless it has a substantial business purpose to use a fiscal year. F, p. C:3-2. C:3-2. Corporations are permitted to deduct $3,000 in net capital losses annually. F, p. C:3-6. C:3-3. Organizational expenses incurred after 2004 are amortized over five years. F, p. C:3-8. C:3-4. Corporations may deduct the adjusted basis of inventory plus one-half of the excess of the propertys FMV over its adjusted basis if the inventory is used for the care of the ill, needy or infants. T, p. C:3-11. C:3-5. Corporations may carry charitable contributions in excess of the income limitation forward for five years. T, p. C:3-13. C:3-6. The dividends-received deduction is designed to reduce double taxation of corporate dividends payable to individual shareholders. F, p. C:3-15. C:3-7. Sparks Corporation receives a dividend of $100,000 from Jill Corporation, a C Corporation. Sparks owns 70% of Jill Corporation stock. Sparks dividends received deduction is $80,000. T, p. C:3-15. C:3-8. An election to forgo an NOL carryback must be made on or before the return due date (including extensions) for the year in which the NOL is incurred. T, p. C:3-18. C:3-9. If a controlling shareholder sells depreciable property to a controlled corporation and the property is depreciable by the purchaser, any gain on the sale is 1231 gain. F, p. C:3-21. C:3-10. All of the taxable income of a personal service corporation is taxed at a flat 35% rate. T, p. C:3-24. C:3-11. Corporate estimated tax payments are due April 15, June 15, September 15 and January 15. F, p. C:3-35. C:3-12. A deferred tax asset indicates that a firm will realize the tax benefit of an event sometime in the future. T, p. C:3-42. C:TB3-1 C:3-13. Deferred tax liabilities occur when expenses are deductible for book purposes before tax purposes. F, Identify which of the following statements is true. a. A corporation is a separate taxpaying entity that must file a tax return annually. b. A newly formed corporation must select its basic accounting method. c. The terms "regular corporation" and "C corporation" are synonymous. d. All of the above are true. d, p. C:3-2. C:3-15. Identify which of the following statements is false. a. A corporation's fiscal year generally must end on the last day of the month. b. A fiscal year may not end on December 31. c. A new corporation can elect a fiscal year that runs from February 16 to February 15 of the following year. d. A corporations first tax year may not cover a full 12- month period. c, p. C:3-2. C:3-16. Identify which of the following statements is true. a. A corporation that is a member of an affiliated group filing a consolidated tax return may be allowed a tax year which is different from the group's parent. b. An S corporation must generally use a calendar
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year. c. A corporations first year must cover a twelve-month period. d. All are false. b, pp. C:3-2 and C:3-3. C:3-17. Which of the following results in a deferred tax asset? a. Revenue or gains are
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This note was uploaded on 04/05/2012 for the course ACCT 4221 taught by Professor Crumbley,d during the Spring '08 term at LSU.

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chapter 3 - A regular corporation must use a calendar year...

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