41. The e following parties must attach a statement to their tax returns for the period in which the Code Sec. 351transfer occurred:
a. shareholders who were party to the exchangeb. all shareholdersc. no shareholders need to include an attachment, only the corporation needs to do thisd. none of the above42. Jeffrey owns 100% of HR Company. In 2011, he lent the firm $70,000. In 2013, he cancelled the debt. The eresults of this debt cancellation are:43. Corporations and individuals differ in that:44. In general, a large C corporation:45. Finest Company is negotiating a compensation package with its president, Ann. Finest’s accountant is worriedthat the firm will not be able to deduct the full amount of compensation as a business expense. Ann is willing toarrange the package in such a manner so that it would be fully deductible by the firm (except for certain itemssuch as incentive stock options). In order to achieve this:a. the full amount of the compensation package must be performance basedb. only the noncash portion of the compensation must be performance basedc. only the bonus portion of the compensation must be performance basedd. only compensation in excess of $1,000,000 must be performance based46. X Corporation’s taxable income for 2013 is $1,500,000. It does not have an alternative minimum tax liabilityin 2013 but it does have to recapture $10,000 of previously taken tax credits. X Corporation made $490,000 inprepayments toward its 2013 tax liability. What is X Corporation’s payment or refund due for 2013?47. Smith owns 85 percent of Smith Sisters Company. On March 8, 2013, she contributed land to the firm. Her
adjusted basis in the land was $60,000 and its fair market value on March 8 was $140,000. Smith did not receiveanything in return for the contribution. As a result of this transaction, Smith Sisters Company will:
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