Question 1

NOL and capital loss carryovers are deductible in calculating the charitable contribution limit modified taxable income,while NOL and capital loss carrybacks are not.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is false regarding consolidated tax returns?

Accepted Answer

A)   An affiliated group can file a consolidated tax return only if it elects to do so.
B)   To file a consolidated tax return, one corporation must own at least 50% of the stock of another corporation.
C)   For a group of corporations filing a consolidated tax return, an advantage is that losses of one group member may offset gains of another group member.
D)   For a group of corporations filing a consolidated tax return, losses from certain intercompany transactions are deferred until realized through a transaction outside of the group.E) None of the above
F) A) and C)

Question 3

TrendSetter Inc.paid $50,000 in premiums for life insurance coverage for its key employees for which TrendSetter Inc.is the beneficiary.What is the nature of the book-tax difference created by this expense?

Accepted Answer

A)   Permanent; favorable.
B)   Permanent; unfavorable.
C)   Temporary; favorable.
D)   Temporary; unfavorable.E) None of the above
F) A) and C)

Question 4

In January 2017,Khors Company issues nonqualified stock options to its CEO,Jenny Svaro.Because the company does not expect Ms.Svaro to leave the company,the options vest at the time they are granted with a total value of $50,000.In December of 2017,the company experiences a surge in its stock price,and Ms.Svaro exercises the options.The total bargain element at the time of exercise is $40,000.For 2017,what is the nature of the book-tax difference due to the options exercised?

Accepted Answer

A)   Favorable and temporary.
B)   Favorable and permanent.
C)   Unfavorable and temporary.
D)   Unfavorable and permanent.
E)   Not enough information to determine.F) A) and B)
G) A) and D)

Question 5

Which of the following is not calculated in the corporate income tax formula?

Accepted Answer

A)   Gross income.
B)   Adjusted gross income.
C)   Taxable income.
D)   Regular tax liability.E) B) and D)
F) None of the above

Question 6

Over what time period do corporations amortize purchased goodwill for tax purposes?

Accepted Answer

A)   180 months.
B)   150 months.
C)   60 months.
D)   None of the choices are correct.E) B) and D)
F) A) and C)

Question 7

TerraWise Inc.reported the following information for 2017:
  What is TerraWise Inc.'s AMTI?

Accepted Answer

$5,900,000...

Question 8

Which of the following is not an acceptable method of determining the required annual payment of federal income tax for corporations?

Accepted Answer

A)   100 percent of the prior year's tax liability (with a few exceptions) .
B)   100 percent of the current year's tax liability.
C)   100 percent of the estimated current year tax liability using the annualized income method.
D)   All of the choices are acceptable methods of determining the required annual payment of federal income tax for corporations.E) All of the above
F) A) and B)

Question 9

AB Inc.received a dividend from CD Corporation and is able to claim a dividends received deduction without limitation.AB owns 10 percent of CD.What is AB's marginal tax rate (to the nearest tenth of a percent)on the dividends received (after taking the DRD into account)assuming its ordinary marginal tax rate is 34%?

Accepted Answer

10.2% [34%...

Question 10

What is the unextended due date of the tax return of a calendar-year corporation for 2017?

Accepted Answer

A)   February 15.
B)   March 15.
C)   April 15.
D)   September 15.E) A) and B)
F) A) and C)

Question 11

Which of the following statements regarding nonqualified stock options (NQOs) is false?

Accepted Answer

A)   If ASC 718 applies, book-tax differences associated with NQOs may be either permanent or temporary.
B)   In a given year when ASC 718 applies, if the value of the options that accrue is greater than the bargain element of options exercised, the book-tax difference for that year is unfavorable.
C)   Before ASC 718 applied, no expense recognition was required for NQOs for financial accounting purposes.
D)   If ASC 718 does not apply, all stock option-related book-tax differences are temporary.E) A) and B)
F) A) and C)

Question 12

Netgate Corporation's gross regular tax liability for 2017 was $95,375.What was its taxable income? (Use Corporate Tax Rate Schedule.)

Accepted Answer

The answer of Netgate Corporation's gross regular tax liability for...

Question 13

A corporation may carry a net capital loss back two years and forward 20 years.

Accepted Answer

A) True 
 B)False

Question 14

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.

Accepted Answer

A) True 
 B)False

Question 15

For tax purposes,companies using nonqualified stock options deduct expenses in the year the options are exercised.

Accepted Answer

A) True 
 B)False

Question 16

A corporation with a minimum tax credit carryover may reduce regular tax down to the amount of its tentative minimum tax when its regular tax exceeds its tentative minimum tax.

Accepted Answer

A) True 
 B)False

Question 17

The amount of a corporation's AMT is the amount of its tentative minimum tax in excess of its regular tax.

Accepted Answer

A) True 
 B)False

Question 18

It is important to distinguish between temporary and permanent book-tax differences for which of the following reasons?

Accepted Answer

A)   Temporary book-tax differences will reverse in future years whereas permanent differences will not.
B)   Certain corporations are required to disclose book-tax differences as permanent or temporary on their tax returns.
C)   Both temporary book-tax differences will reverse in future years whereas permanent differences will not and certain corporations are required to disclose book-tax differences as permanent or temporary on their tax returns are reasons for why a corporation might distinguish between temporary and permanent differences.
D)   Neither temporary nor permanent book-tax differences will reverse in future years nor are certain corporations required to disclose book-tax differences as permanent or temporary on their tax returns.E) B) and D)
F) A) and C)

Question 19

Which of the following regarding Schedule M-1 and Schedule M-3 of Form 1120 is false?

Accepted Answer

A)   In general, smaller corporations are required to complete Schedule M-1 while larger corporations are required to complete Schedule M-3.
B)   Schedule M-3 lists more book-tax differences than Schedule M-1.
C)   Both Schedules M-1 and M-3 reconcile to a corporation's bottom line taxable income.
D)   Schedule M-1 does not distinguish between temporary and permanent book-tax differences whereas Schedule M-3 does.E) A) and B)
F) A) and C)

Question 20

For 2017,SRH's taxable income is $35,000 and JHH's taxable income is $45,000.Together,Scott and Jackson Howard own 100 percent of both corporations.What is the combined tax liability of the two corporations? (Use Corporate Tax Rate Schedule.)

Accepted Answer

$15,450
SRC and JHH are a brother-sister...

Exam 5: Corporate Operations

A corporation may carry a net capital loss back two years and forward 20 years.

Correct Answer
verified

Which of the following statements regarding nonqualified stock options (NQOs) is false?

Correct Answer
verified

What is the unextended due date of the tax return of a calendar-year corporation for 2017?

Correct Answer
verified

Over what time period do corporations amortize purchased goodwill for tax purposes?

Correct Answer
verified

Netgate Corporation's gross regular tax liability for 2017 was $95,375.What was its taxable income? (Use Corporate Tax Rate Schedule.)

Correct Answer
verified

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.

Correct Answer
verified

TrendSetter Inc.paid $50,000 in premiums for life insurance coverage for its key employees for which TrendSetter Inc.is the beneficiary.What is the nature of the book-tax difference created by this expense?

Correct Answer
verified

NOL and capital loss carryovers are deductible in calculating the charitable contribution limit modified taxable income,while NOL and capital loss carrybacks are not.

Correct Answer
verified

The amount of a corporation's AMT is the amount of its tentative minimum tax in excess of its regular tax.

Correct Answer
verified

Which of the following statements is false regarding consolidated tax returns?

Correct Answer
verified

For tax purposes,companies using nonqualified stock options deduct expenses in the year the options are exercised.

Correct Answer
verified

Correct Answer
verified
10.2% [34%...
View Answer

For 2017,SRH's taxable income is $35,000 and JHH's taxable income is $45,000.Together,Scott and Jackson Howard own 100 percent of both corporations.What is the combined tax liability of the two corporations? (Use Corporate Tax Rate Schedule.)

Correct Answer
verified
$15,450
SRC and JHH are a brother-sister...
View Answer

A corporation with a minimum tax credit carryover may reduce regular tax down to the amount of its tentative minimum tax when its regular tax exceeds its tentative minimum tax.

Correct Answer
verified

Which of the following is not calculated in the corporate income tax formula?

Correct Answer
verified

Which of the following regarding Schedule M-1 and Schedule M-3 of Form 1120 is false?

Correct Answer
verified

Correct Answer
verified

Which of the following is not an acceptable method of determining the required annual payment of federal income tax for corporations?

Correct Answer
verified

TerraWise Inc.reported the following information for 2017: What is TerraWise Inc.'s AMTI?

Correct Answer
verified
$5,900,000...
View Answer

It is important to distinguish between temporary and permanent book-tax differences for which of the following reasons?

Correct Answer
verified

Exam 5: Corporate Operations

A corporation may carry a net capital loss back two years and forward 20 years.

Correct AnswerverifiedShow Answer

Which of the following statements regarding nonqualified stock options (NQOs) is false?

Correct AnswerverifiedShow Answer

What is the unextended due date of the tax return of a calendar-year corporation for 2017?

Correct AnswerverifiedShow Answer

Over what time period do corporations amortize purchased goodwill for tax purposes?

Correct AnswerverifiedShow Answer

Netgate Corporation's gross regular tax liability for 2017 was $95,375.What was its taxable income? (Use Corporate Tax Rate Schedule.)

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

TrendSetter Inc.paid $50,000 in premiums for life insurance coverage for its key employees for which TrendSetter Inc.is the beneficiary.What is the nature of the book-tax difference created by this expense?

Correct AnswerverifiedShow Answer

NOL and capital loss carryovers are deductible in calculating the charitable contribution limit modified taxable income,while NOL and capital loss carrybacks are not.

Correct AnswerverifiedShow Answer

The amount of a corporation's AMT is the amount of its tentative minimum tax in excess of its regular tax.

Correct AnswerverifiedShow Answer

Which of the following statements is false regarding consolidated tax returns?

Correct AnswerverifiedShow Answer

For tax purposes,companies using nonqualified stock options deduct expenses in the year the options are exercised.

Correct AnswerverifiedShow Answer

Correct Answerverified10.2% [34%...View AnswerShow Answer

For 2017,SRH's taxable income is $35,000 and JHH's taxable income is $45,000.Together,Scott and Jackson Howard own 100 percent of both corporations.What is the combined tax liability of the two corporations? (Use Corporate Tax Rate Schedule.)

Correct Answerverified$15,450SRC and JHH are a brother-sister...View AnswerShow Answer

A corporation with a minimum tax credit carryover may reduce regular tax down to the amount of its tentative minimum tax when its regular tax exceeds its tentative minimum tax.

Correct AnswerverifiedShow Answer

Which of the following is not calculated in the corporate income tax formula?

Correct AnswerverifiedShow Answer

Which of the following regarding Schedule M-1 and Schedule M-3 of Form 1120 is false?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not an acceptable method of determining the required annual payment of federal income tax for corporations?

Correct AnswerverifiedShow Answer

TerraWise Inc.reported the following information for 2017: What is TerraWise Inc.'s AMTI?

Correct Answerverified$5,900,000...View AnswerShow Answer

It is important to distinguish between temporary and permanent book-tax differences for which of the following reasons?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
10.2% [34%...
View Answer

Correct Answer
verified
$15,450
SRC and JHH are a brother-sister...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$5,900,000...
View Answer

Correct Answer
verified