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Unformatted text preview: b" is incorrect. The gain recognized by Sly on the sale should be calculated as the difference
between the original basis to Potter, $60,000, and not the fair market value of $75,000.
Choice "c" is incorrect. The 19X1 gain in this question is utilizing the fair market value of the land instead
of the basis. The gain reported in 19X2 is also incorrect as discussed in the explanation to choice "b"
above. CPA-02156 Type1 M/C A-D Corr Ans: B PM#77 R 3-01 59. CPA-02156 PII May 93 #50 Page 32
Which of the following tax credits cannot be claimed by a corporation?
d. Foreign tax credit.
Earned income credit.
Alternative fuel production credit.
General business credit. CPA-02156
Choice "b" is correct. The earned income credit can only be claimed by individuals, not corporations.
Choice "a" is incorrect. Corporations can claim the foreign tax credit.
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.
- Fall '10
- The Land