Corporations: Introduction and Operating Rules
CHAPTER 17 CORPORATIONS: INTRODUCTION AND OPERATING RULES
TRUE/FALSE 1. Jeff is the sole shareholder of a C corporation. In 2007, the corporation sold a capital asset for a gain of $20,000. Jeff is
CHAPTER 19 CORPORATIONS: DISTRIBUTIONS NOT IN COMPLETE LIQUIDATION
TRUE/FALSE 1. Distributions by a corporation to its shareholders are presumed to be dividends unless the parties can prove otherwise. REF: p. 19-3
ANS: T 2.
A distribution from a co
CHAPTER 21 PARTNERSHIPS
TRUE/FALSE 1. Unlike a subchapter C corporation, a partnership is subject to only one level of taxation and can often liquidate in a tax-deferred manner.
ANS: T A partnership is a flow-through entity subject to only one level
CHAPTER 18 CORPORATIONS: ORGANIZATION AND CAPITAL STRUCTURE
TRUE/FALSE 1. The reason for 351 (which permits transfers to controlled corporations to be tax free) can be justified under the wherewithal to pay concept. REF: p. 18-3
ANS: T 2.
CHAPTER 28 INCOME TAXATION OF TRUSTS AND ESTATES
TRUE/FALSE 1. Trusts are created exclusively to reduce tax liabilities.
ANS: F Tax consequences generally are secondary to the decision to create a trust. PTS: 1 REF: p. 28-2 | Table 28-1 2. A trust
CHAPTER 22 S CORPORATIONS
TRUE/FALSE 1. S corporations are treated as partnerships under state laws. REF: p. 22-2
ANS: F 2.
Liabilities affect the owners basis differently in an S corporation versus a partnership. REF: p. 22-2
ANS: T 3.
An S cor
CHAPTER 27 THE FEDERAL GIFT AND ESTATE TAXES
TRUE/FALSE 1. Sometimes also known as transaction taxes, Federal gift and estate taxes are excise taxes. REF: p. 27-2
ANS: T 2.
A lifetime transfer that is supported by full and adequate consideration i
CHAPTER 24 MULTISTATE CORPORATE TAXATION
TRUE/FALSE 1. Roughly two-thirds of all taxes paid by businesses in the U.S. are to state, local, and municipal jurisdictions.
ANS: F About forty percent of all business taxes are paid to state and local age
CHAPTER 23 EXEMPT ENTITIES
TRUE/FALSE 1. The only purpose of the Federal income tax law is to raise revenue.
ANS: F The major purpose of the Federal income tax law is to raise revenue. Among the other purposes are social considerations and economic
CHAPTER 20 CORPORATIONS: DISTRIBUTIONS IN COMPLETE LIQUIDATION AND AN OVERVIEW OF REORGANIZATIONS
TRUE/FALSE 1. A liquidation can occur for tax purposes even though the corporation has retained some assets to pay remaining debts and preserve legal s