CHAPTER 20--CORPORATIONS AN

Skinner corporation a calendar year c corporation had

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84. Skinner Corporation, a calendar year C corporation, had the following transactions during the current year: Income from operations $800,000 Expenses from operations 900,000 Dividends from Siskin Corporation (10% ownership) 200,000 Skinner’s taxable income (or NOL) for the current year is: A. $100,000 taxable income. B. $40,000 NOL. C. $60,000 NOL. D. $100,000 NOL. E. None of the above. 8
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85. During the current year, Goose Corporation (a calendar year, cash basis taxpayer) receives cash dividends as follows: Source of Dividends Ownership Percentage Dividends Emu Corporation 90% $90,000 Robin Corporation 21% 60,000 Crane Corporation 10% 30,000 Presuming the taxable income limitation does not apply, Goose Corporation’s dividends received deduction for the current year is: 86. In the current year, Auburn Corporation (a calendar year taxpayer) has the following income and expenses: Gross income from operations $ 950,000 Expenses from operations 1,000,000 Dividends from Blond Corporation 200,000 Auburn Corporation owns 10% of the stock of Blond Corporation. The dividends received deduction for the current year is: 87. Teal Corporation is incorporated in November 2010. The following formation expenses are incurred in 2010: Legal and accounting expenses incident to organization $4,000 Expenses of temporary directors and organizational meetings of directors and shareholders 2,000 Expenditures connected with issuing and selling shares of stock 3,000 Except for the legal and accounting expenses which are paid in 2011, all other expenses are paid in 2010. If Teal Corporation uses the cash basis and adopts a calendar year for tax purposes, the amount of organizational expenditures it can elect to expense for 2010 is: 88. Cardinal Corporation, a calendar year taxpayer, was formed on June 1, 2010, and incurred organizational expenditures of $53,000. Its deduction for these expenditures for 2010 can be a: A. Maximum of $5,000. B. Maximum of $2,000 + (7/180 ´ $51,000). C. Maximum of $3,000 + (7/180 ´ $50,000). D. Minimum of 7/180 ´ $53,000. E. None of the above. 9
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89. Two unrelated, calendar year C corporations have the following taxable income for the current year: White Corporation Red Corporation Taxable income $60,000 $80,000 Red Corporation is a qualified personal service corporation. Based on these facts, their corporate tax liability is:
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  • Spring '12
  • honig
  • Corporation, Income tax in the United States, C CORPORATION

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