20.Which of the following statements regarding proposed regulations is correct? a.Proposed and temporary regulations are generally issued simultaneously.b.Proposed regulations do not provide any insight into the IRS’s interpretation of the tax law.c.Proposed regulations expire after 5 years.d.Practitioners do not comment on proposed regulations.Topic: Corporate Tax Elections and OperationsObjective: Analyze the basic tax elections available to the corporation. 21.Identify which of the following statements is false. Topic: Corporate DistributionsObjective: Determine the tax consequences of nonliquidating property distributions and stock dividends. 22.A corporation distributes land and the related liability to Meg, its sole shareholder. The land has a FMV of $60,000 and is subject to a liability of $70,000. The corporation has current and accumulated Earnings & Profit of $80,000. The corporation’s adjusted basis for the property is $70,000. What effectdoes the transaction have on the corporation? Topic: Corporate DistributionsObjective: Determine the tax consequence of the redemption of stock.23.Elijah owns 20% of Park Corporation’s single class of stock. Elijah’s basis in the stock is $8,000. Park’s E&P is $28,000. If Park redeems all of Elijah’s stock for $48,000, Elijah must report dividend income of
Final Examination Study GuideACC/497 Version 717Topic: Basics of Flow-Through Entities (S Corporations and Partnerships)Objective: Determine which items are separately stated and items included in ordinary income of an S corporation and partnership. 24.Matt and Joel are equal partners in the MJ Partnership. For the current year ended December 31, the partnership has book income of $80,000, which includes the following deductions: (1) guaranteed payments (salaries) to partners: Matt, $35,000; and Joel, $25,000; and (2) charitable contributions: $6,000. The book income amount does not include any sales of capital assets or Sec. 1231 assets or any tax-exempt income. Based on the preceding information, what amount should be reported as ordinary income on the partnership return? a.$60,000b.$80,000c.$86,000d.$140,000Topic: Distributions and Termination of Interests in S Corporations and PartnershipsObjective: Explain the process of terminating an S election and the tax consequences of the termination.
- Fall '09
- Balance Sheet, Securities and Exchange Commission, Examination Study Guide, Final Examination Study