Aboutblank correct answer c 29 business section 1

17/59 about:blank
A. $2,100
B. $1,800
C. $1,500
D. $ 600
Rationale:
FMV of three computers is $2,100 and basis is $1,500. The unrealized gain at the time of the contribution
is $600. The corporation is not an S corporation, and therefore may claim a deduction of $1,800 ($1,500
basis + $300 one-half of the property\'s appreciation gain if the property was sold at FMV).
For a charitable contribution of property, the corporation must reduce the contribution by the sum of:
The ordinary income and short-term capital gain that would have resulted if the property were sold
at its FMV and
For certain contributions, the long-term capital gain that would have resulted if the property were
Correct Answer: C
29 Business Section 1: Businesses Business entities C D 07/20/2012
Subject: Types of business entities and their filing requirements
FFA EA Book Reference: CH 14 Partnerships
Question:
The Rising Moon Partnership with a fiscal year ending March 31 terminated the partnership on January 31,
2011. If no extension is filed by Rising Moon, by what date must they file their final Form 1065 U. S.
Return of Partnership Income?
A. March 15, 2012
B. April 15, 2012
C. May 15, 2011
D. July 15, 2011
Rationale:
The partnership\'s tax year ends on the date of termination. Generally, a domestic partnership must file
Form 1065 by the 15th day of the 4th month following the date its tax year ended as shown at the top of
Form 1065.
Correct Answer: C
30 Business Section 1: Businesses
Corporations in
general
B A 07/20/2012
Subject: Special deductions (e.g., dividends received deductions, charitable deduction).
FFA EA Book Reference: CH 13 Corporations
Question:
During the tax year, a corporation contributed three computers (that had been purchased and used for 18
months by the corporation) to the New Roads Elementary School. The computers had a fair market value
of $700 each and a basis of $500 each. What is the corporation\'s charitable contribution with regards to
the computers?

7/20/12 Completed on 07/20/2012 with a score of <b>24%</b> including 24 Correct and 76 Incorrect
18/59 about:blank
sold at its FMV.
Larger deduction. A corporation (other than an S corporation) may be able to claim a deduction equal to
the lesser of (a) the basis of the donated inventory or property plus one-half of the property\'s appreciation
gain if the donated inventory or property was sold at fair market value on the date of the donation), or (b)
two times basis of the donated inventory or property. This deduction may be allowed for certain
contributions of:
31 Business
Section 2: Business