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Unformatted text preview: ecture: Regulation 3 CPA-02066 Type1 M/C A-D 25. CPA-02066 ARE Nov 95 #17 Corr Ans: B PM#35 R 3-01 Page 6 A corporation may reduce its regular income tax by taking a tax credit for:
d. Dividends-received exclusion.
Foreign income taxes.
State income taxes.
Accelerated depreciation. CPA-02066
Choice "b" is correct. Under certain conditions a taxpayer may take a credit against its U.S. income tax
for foreign income taxes paid.
Choice "a" is incorrect. The dividends-received deduction (not exclusion) reduces taxable income; it is
not a tax credit.
Choice "c" is incorrect. State income taxes reduce taxable income; they are not tax credits.
Choice "d" is incorrect. Accelerated depreciation reduces taxable income; it is not a tax credit. CPA-02068 Type1 M/C A-D 26. CPA-02068 ARE Nov 95 #18 Corr Ans: D PM#36 R 3-01 Page 37 The accumulated earnings tax can be imposed:
d. On both partnerships and corporations.
On companies that make...
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