Properly accrued 5000 for an income item on the basis

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Unformatted text preview: ture: Regulation 3 Rule: A corporate charitable deduction that exceeds the limit for deduction in one year can be carried over to the succeeding five tax years. It cannot be carried back. Choices "a", "b", and "d" are incorrect, per the above rule. CPA-02052 Type1 M/C A-D 16. CPA-02052 ARE Nov 95 #10 Corr Ans: B PM#25 R 3-01 Page 6 In 1994, Stewart Corp. properly accrued $5,000 for an income item on the basis of a reasonable estimate. In 1995, after filing its 1994 federal income tax return, Stewart determined that the exact amount was $6,000. Which of the following statements is correct? a. No further inclusion of income is required as the difference is less than 25% of the original amount reported and the estimate had been made in good faith. b. The $1,000 difference is includible in Stewart's 1995 income tax return. c. Stewart is required to notify the IRS within 30 days of the determination of the exact amount of the item. d. Stewart is required to file an amended return to report the additional $1,000 of in...
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