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ANSWERTrueLO 10.4DIFFICULTY: Easy_____
16. A partial liquidation occurs when only a few of a corporation’s shareholders have their stock redeemed by a corporation.
Chapter 10: Taxation of Corporations 3LO 10.4DIFFICULTY: Easy_____ 17. The accumulated earnings tax and the personal holding company tax can both apply to a corporation in place of the regular corporate income tax.LO 10.5DIFFICULTY: Moderate_____ 18. A controlled corporate group can consist of a parent and subsidiary or two corporations owned by the same individual.DIFFICULTY: Easy_____ 19. In determining consolidated net income, each corporation first must compute separate taxableincome.DIFFICULTY: Easy_____ 20. Intercompany dividends are one of many items eliminated in preparing a consolidated tax return.LO 10.6DIFFICULTY: EasyShort-Answer Questions: Provide a brief written answer to each of the following questions.Note to Instructor: Questions 17 through 19 relate to material in the Appendix.1. What are the six characteristics of a corporation?LO 10.1DIFFICULTY: Easy2. What avenues are available to a corporation to obtain capital for operations?LO 10.1DIFFICULTY: Easy
What is a major advantage of the corporate form for owner-employees?
4Taxation for Decision Makers Test BankDIFFICULTY: Easy4. Why is preferred stock so named?LO 10.1DIFFICULTY: Easy5. What are the various ownership requirements for a corporation receiving dividends to be eligible for adividend received deduction?LO 10.2DIFFICULTY: Moderate6. What is the limit for corporate charitable contribution deductions?