In 2017, Stone, a cash-basis taxpayer, incorporated her CPA practice. No liabilities were transferred. The following assets were transferred to the corporation:Cash (checking account)$ 500Computer equipmentAdjusted basis30,000Fair market value34,000Cost40,000Immediately after the transfer, Stone owned 100% of the corporation’s stock. The corporation’s total basis for the transferred assets is A.$34,500B.$30,000C.$40,500D.$30,500 Andi Corp. issued $1 million face amount of bonds in 2012 and established a sinking fund to pay the debt at maturity. The bondholders appointed an independent trustee to invest the sinking-fund contributions and to administer the trust. In2017, the sinking fund earned $60,000 in interest on bank deposits and $8,000 in net long-term capital gains. All of the trust income is accumulated with Andi’s periodic contributions so that the aggregate amount will be sufficient to pay the bonds when they mature. What amount of trust income was taxable to Andi in 2017? Which one of the following is a tax preference item in figuring a corporation’s alternative minimum taxable income?
Collander Corporation is preparing Schedule M-1 of its Form 1120, U.S. Corporation Income Tax Return. Which of the following statements is false with regard to the preparation of Collander’s Schedule M-1?
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- Spring '17
- Taxation in the United States