Exam 2 Review - students

pdf

School

George Mason University *

*We aren’t endorsed by this school

Course

20151

Subject

Accounting

Date

Apr 3, 2024

Type

pdf

Pages

Uploaded by ChefSnowHare3

ACCT 530: Advanced Income Tax Exam #2 Review

Exam #2 What to bring: 1) Electronic device to complete the exam 2) Scratch sheet of paper & pen/pencil 3) Calculator (simple or financial ONLY) 4) One note card (3”x5”, can write on one side, must be handwritten) All other materials must be left on the perimeter walls of the classroom

Exam #2 1) Module #6 – Corporations' Redemptions, Liquidations, and Reorganizations 2) Module #7 – Multinational Taxation 3) Module #8 – Accounting for Income Taxes 4) Module #9 - Flow Through Entities 5) Module #10 – Various Topics

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Module #6 – Corporations' Redemptions, Liquidations, and Reorganizations Lamar owns 2,500 shares of stock in Ravens Corporation. The remaining 7,500 shares of Packers are owned as follows: 1,500 by Lamar’s daughter, 2,000 by Lamar’s aunt, and 4,000 by a partnership in which Lamar has a 20% interest. Determine the number of shares Lamar owns (directly and indirectly) in Ravens Corporation.

Module #6 – Corporations' Redemptions, Liquidations, and Reorganizations Jalen owns 40% of shares of Eagles Inc. stock at a time when Eagles has 10,000 shares of stock outstanding. The remaining shareholders are unrelated to Jalen. What is the minimum number of shares Jalen must redeem from Eagles so that the transaction will receive sale & exchange treatment?

Module #6 – Corporations' Redemptions, Liquidations, and Reorganizations Patrick purchased a 15-year, $50,000 bond from Chiefs Corporation for $20,000 eight years ago. Interest of $2,300 has been amortized over the eight years and added to Patrick’s bond basis. In the current year, Chiefs is acquired by Broncos in a "Type A" reorganization. Patrick exchanges his Chiefs bond for a 7-year, $55,000 Broncos bond. What are the tax consequences to Patrick?

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Module #6 – Corporations' Redemptions, Liquidations, and Reorganizations Tua Corporation obtained 200,000 shares of Dolphins Corporation's stock 10 years ago. In the current year, Tua exchanges 40% of its stock for 500,000 of the remaining 600,000 shares of Dolphins stock. After the transaction, Tua owns 700,000 of the 800,000 NFL shares outstanding. What type of tax-related transaction is this?

Module #7 – Multinational Taxation 1) LO1) Define 'territorial' and 'worldwide' tax systems (CO4) 2) LO2) Analyze the significant changes to the U.S. tax system under the Tax Cuts and Jobs Act of 2017 (CO4) 3) LO3) Apply the rules for sourcing income and deductions into U.S. and foreign categories (CO4) 4) LO4) Define 'income shifting', 'tax havens', and 'foreign tax credits' (CO4)

Module #7 – Multinational Taxation Burrow Co., a U.S. multinational corporation controls several CFCs that have a combined $25,000,000 of net tested income. Burrow Co. earns 10% of its income from exporting goods overseas. The CFCs own $200,000,000 in QBAI. In total, Burrow Co. has $5,000,000,000 in gross receipts and expenses of $4,500,000,000. Burrow Co. has $1,000,000,000 in payments to a CFC based in a foreign country. What is Burrow Co.’s tax liability on exporting activities after the beneficial FDII tax rate?

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Module #7 – Multinational Taxation McCaffrey, Inc., a U.S. corporation, receives $500,000 of foreign-source interest income on which foreign taxes of $5,000 are withheld. McCaffrey’s worldwide taxable income is $900,000, and its U.S. Federal income tax liability before FTC is $189,000. What is McCaffrey’s foreign tax credit?

Module #7 – Multinational Taxation Josh, a U.S. resident, received a $5,000 dividend from Bills Inc., Inc. a foreign corporation that reported gross income of $12,000,000 effectively connected with the conduct of a U.S. trade or business for the immediately preceding three tax years. Bill’s total gross income for the same period was $15,000,000. What is Josh’s U.S. sourced income related to this transaction?

Module #8 – Taxes in the Financial Statements 1) GAAP/Cash Effective Tax Rates 2) Unrecognized Tax Benefits 3) Valuation Allowances 4) ASC 740

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Module #8 – Taxes in the Financial Statements Trevor Co. has revenues of $800,000 and expenses of $600,000 . During the year, Trevor Co. also earns $100,000 in municipal bond interest. $100,000 of Trevor Co.’s expenses relate to depreciation, in which it records $120,000 of deductions on it’s tax return. What is Trevor Co.’s GAAP effective tax rate?

Module #8 – Taxes in the Financial Statements Tyreek, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Based on this information, determine Tyreek’s net Federal deferred tax asset or net deferred tax liability at year -end. Assume a 21% Federal corporate tax rate and no valuation allowance. If Tyreek has beginning of year book-tax differences in accumulated depreciation of $62,400, then what is the adjustment for the current year difference?

Module #8 – Taxes in the Financial Statements Dak Co. constructs the following table in determining how to apply ASC 740-10 to its filing position for a transfer pricing issue. Its book-tax provision for the year, including $3 million for the uncertain transfer pricing issue, is $10 million. Under ASC 740- 10, Dak’s book income tax expense for this item is:

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Module #9 – Flow Through Entities 1) LO1) Distinguish among the various types of entities treated as partnerships for tax purposes (CO6) 2) LO2) Describe the conceptual basis for partnership taxation and how partnership income is reported and taxed (CO6) 3) LO3) Calculate a partnership’s taxable income and basis (CO6) 4) LO4) Determine the tax treatment of proportionate current distributions from a partnership to a partner (CO6) 5) LO5) Analyze the decision and define the requirements to the subchapter S election (CO6)

Module #9 – Flow Through Entities Brock and Deebo form an equal partnership during the current year, DB. Brock contributes cash of $5,000,000, and Deebo contributes property (adjusted basis of $3,000,000, fair market value of $6,000,000) subject to a liability of $1,000,000. As a result of these transactions, Brock’s has a basis in his partnership of how much:

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Module #9 – Flow Through Entities Jared and Amon formed the equal JA Partnership on January 1 of the current year. Jared contributed $80,000 of cash and land with a fair market value of $90,000 and an adjusted basis of $75,000. Amon contributed equipment with a fair market value of $170,000 and an adjusted basis of $20,000. Jared had used the equipment in his sole proprietorship. What is Jared and Amon’s recognized gain on this transaction?

Module #9 – Flow Through Entities AJ’s basis was $1,000,000 in the Eagles Partnership interest just before he received a proportionate current (nonliquidating) distribution consisting of four items: 1. land held for investment (basis $450,000, FMV $700,000) 2. inventory (basis $100,000, FMV $200,000) 3. accounts receivable (basis and FMV $300,000) 4. $500,000 cash After the distribution, what is AJ’s basis in each asset?

Module #10 – Various Topics LO1) Describe and analyze the role of taxes as a business strategy (CO6) LO2) Determine the tax consequences of cryptocurrency (CO6) LO3) Understand the tax and non-tax consequences of the Inflation Reduction Act of 2022 (CO 6) LO4) Understand other tax law changes on the horizon (CO 6)

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Module #10 – Various Topics CJ is going to accumulate $5,000 this year in his qualified retirement accounts. CJ plans to retire in 36 years. He expects to receive a 4% annual rate of return. His current tax rate is 22% and his expected tax rate at retirement is 37%. How much is his Roth advantage?

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Module #10 – Various Topics Herbert is investing $2,000. He can invest in a city of San Diego, CA, municipal bond or a Chargers Inc. (rate of return 4%). Herbert’s MTR is 22%. At what rate of return for the San Diego, CA, municipal bond would Herbert be indifferent between investing in it vs. Chargers?

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version