Question cpa 02060 dart corp a calendar year domestic

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Question CPA-02060Dart Corp., a calendar year domestic C corporation, is not a personal holding company. For purposes of the accumulated earnings tax, Dart has accumulated taxable income for Year 1. Which step(s) can Dart take to eliminate or reduce any Year 1 accumulated earnings tax?I.Demonstrate that the "reasonable needs" of its business require the retention of all or part of the Year 1 accumulated taxable income.II.Pay dividends by March 15, Year 2.a.I only.b.II only.c.Both I and II.d.Neither I nor II.ExplanationChoice "c" is correct. Dart can take both actions to eliminate or reduce any Year 1 accumulated earnings tax. A corporation that can demonstrate that its reasonable business needs require it to accumulate earnings can escape the accumulated earnings tax on the portion reasonably accumulated. Dividends paid by the 15th day of the third month after the close of the corporation's tax year reduce the accumulated earnings subject to the accumulated earnings tax.Choices "a", "b", and "d" are incorrect. Each of these answers treats either I or II (or both) incorrectly.
Becker Professional EducationRegistered to: 2011 Edition. Distributed by DeVry/Becker Educational Development Corp. Copyright ?2010 DeVry/Becker Educational Development Corp. All rights reserved.Question CPA-02061Platt owns land that is operated as a parking lot. A shed was erected on the lot for the related transactions with customers. With regard to capital assets and Section 1231 assets, how should these assets be classified?LandSheda.CapitalCapitalb.Section 1231Capitalc.CapitalSection 1231d.Section 1231Section 1231ExplanationChoice "d" is correct. Because the parking lot and the shed constitute real estate and depreciable assetsused in a trade or business, they are not capital assets per the definition below.Note:The parking lot and shed will fall under Section 1231 (provided they are used in the business over 12 months) and possibly Section 1250 and 1245, respectively, upon sale of the assets.Capital assets are defined as all property held by the taxpayer except:1.Property normally included in inventory or held for sale to customers in the ordinary course of business.2.Depreciable property and real estate used in business.3.Accounts and notes receivable arising from sales or services in the taxpayer’s business.4.Copyrights, literary, musical or artistic compositions.5.Treasury stock.
Becker Professional EducationRegistered to: 2011 Edition. Distributed by DeVry/Becker Educational Development Corp. Copyright ?2010 DeVry/Becker Educational Development Corp. All rights reserved.Question CPA-02062Eastern Corp., a calendar year corporation, was formed January 3, Year 1, and on that date placed five-year property in service. The property was depreciated under the general MACRS system. Eastern did not elect to use the straight-line method. The following information pertains to Eastern:Eastern's Year 1 taxable income$300,000Adjustment for the accelerated depreciation taken on Year 1 fiveyear property1,000Year 1 tax

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