(Blank)
True - Because you always have to recognize income to the extent of boot received and to the extent you recognize income you receive basis.
If a liability is assumed and there is no business purpose for assuming that liability, what is the four letter word the liability is treated as?
Boot
True or False? Gain or loss realized in a section 351 transaction will be recognized if the taxpayer receives boot in the exchange.
Assuming the transaction qualified for Section 351 treatment, if Maria receives stock valued at $150,000 in exchange for a piece of land she purchased for $100,000, what is Maria's basis in the stock?
$100,000
Income included in book income but excluded from taxable income results in favorable or unfavorable book-tax difference?
Favorable. Book > Tax = favorable from book-tax perspective.
Which of the following is not included in the corporate income tax formula?
1) Gross Income
2) Adjusted Gross Income
3) Taxable Income
Adjusted Gross Income
True or False? Corporations are not allowed to deduct charitable contributions in excess of 10% of the corporation's taxable income (before the charitable contribution and certain other deductions).
True
If Han transferred land he owned for 3 years to a corporation in exchange for stock. Han sold the stock 8 months later. Is this a long-term or short-term capital transaction?
Long-term. The holding period of the stock includes the holding period of the land as an investment
"Control" is required for when participating in a transaction that qualifies for Section 351 treatment. Does "Control" mean control over 80% of the voting stock, 80% of the total number of share of each class nonvoting class or both?
Both.
What is the name of the tax form filed by C corporations?
Form 1120
Can a corporation take a charitable deduction?
Yes.
True or False? For estimated tax purposes, a "large" corporation is any corporation with average annual gross receipts of $5,000,000 in the three years prior to the current year.
False - For estimated tax purposes, a "large" corporation is any corporation with more than $1,000,000 of taxable income in any of the three years prior to the current year. Large corporations can use the prior year's income tax liability to estimate only the first quarter tax payment...the remaining estimated tax payments must be made based on actual taxable income. Small corporations can use the prior year tax liability for all estimated tax payments.
True or False? Corporations have a larger standard deduction than individual taxpayers because they generally have higher revenues.
False - corporations do not have standard deductions.
When is the first corporate quarterly tax due for a calendar-year corporation?
April 15th
True or False? Corporate taxable income is subject to a flat 21% tax rate.
True.
True or False? The definition of property as it relates to a Section 351 transaction includes money.
True.
Carlos contributed real estate with the following attributes in exchange for all the corporation's stock in a Section 351 transaction. What is his basis in the corporation?
Basis = $500, FMV = $800, subject to a $100 mortgage
Basis in corporation = basis of asset exchanged - liabilities assumed = $400
True or False? A corporation may carry a net capital loss back two years and forward indefinitely.
False - a corporation carries a net capital loss back three years and forward five years.
What amount of capital losses can corporations use to offset their ordinary income?
$0. Corporations cannot deduction capital losses against ordinary income.
True or False? A calendar year corporation that requests an extension for filing their tax returns will have an extended tax return due date of October 15th. Remember initial due date is now April 15th.
True