Question 1Which of the following events is an intercompany transactionthat requires the deferral and later recognition of income? Question 2Jackson and Tanker Corporations are members of an affiliatedgroup. The two corporations have been affiliated since they were formed lastyear. Both corporations have always used a calendar year as their tax year.Tanker, the subsidiary, has a separate return year NOL of $14,000 from lastyear. Jackson Corporation has a separate return year NOL of $16,000 from lastyear. Commencing this year, the two corporations filed a consolidated taxreturn. The NOLs can be carried over.Question 3Yong contributes a machine having an adjusted basis of$20,000 and an FMV of $25,000 for a 10% partnership interest. Yong had taken$10,000 of depreciation prior to the contribution. The partnership has noliabilities. As a result of the contribution, Yong must recognizeQuestion 4Meg and Abby are equal partners in the AM Partnership, whichearns $40,000 ordinary income, $6,000 long-term capital gain (LTCG), and $2,000Sec. 1231 loss during the current year. What is the amount and character ofincome that must be reported on Abby’s tax return for this year’s partnershipoperations? Question 5In computing the ordinary income of a partnership, adeduction is allowed for Question 6If a distribution occurs within ________ years of thecontribution date, in a nonliquidating distribution that does not qualify forSec. 751 treatment, the distribution event may trigger a precontribution gainor loss. Question 7Ted King’s basis for his interest in the Troy Partnership is$24,000. In complete liquidation of his interest, King receives cash of $4,000and real property (not a Sec. 751 asset) having an FMV of $40,000. Troy’sadjusted basis for this realty is $15,000. Section 736 does not apply. King’sbasis for this realty is Question 8Han purchases a 25% interest in the CHOP Partnership fromHuang for $600,000. The partnership has assets with a basis of $1,600,000. Whatis the amount of the basis adjustment, if the partnership has a 754 election inplace?Question 9Which of the following would terminate a Subchapter Selection?Question 10Trusts that can own S corporation stock include all of thefollowing exceptQuestion 11Dilley Corporation is an electing S corporation that uses acalendar year as its tax year. On October 31, Dilley’s S election is terminatedbecause of the acquisition of stock by an ineligible stockholder. DilleyCorporation shareholder Alan is allocated an S corporation loss for the year,which cannot be used because of the basis limitation. Alan will lose the unusedloss if not used by.Question 12Greg transfers property on August 8 of the current year withan adjusted basis of $40,000 and an FMV of $90,000 to his ex-wife as a propertysettlement that is part of their divorce agreement. The property settlementagreement and the divorce were both finalized on June 3 of the current year.Greg has made a gift of Question 13In 1998, Delores made taxable gifts to her son of propertywith an FMV of $200,000. In the current year when Delores dies, the property isworth $800,000. The amount included in Delores’s estate tax base because of the1998 gift is Question 14Which of the following is a completed gift? Question 15A stock redemption to pay death taxes under Sec. 303 isgenerally treated as Question 16Four years ago, Roper transferred to his son ownership of a$100,000 life insurance policy that Roper purchased on his own life in 2000.The cash value of the policy on the transfer date was $25,000. Roper died onMarch 1st of this year. The amount included in Roper’s gross estate due to the life insurance policy isQuestion 17If a state has adopted the Revised Uniform Principal andIncome Act, which of the following statements is correct? Question 18A simple trust Question 19Revocable trusts means Question 20Which of the following activities is protected byaccountant-client privilege? Question 21On April 15, 2010, a married couple filed their joint 2009tax return showing gross income of $120,000. Their return was prepared by aprofessional tax preparer who mistakenly omitted $45,000 of income, which thepreparer in good faith considered to be nontaxable. No information with regardto this omitted income was disclosed on the return or attached statements. Bywhat date must the IRS assert a notice of deficiency before the statute oflimitations expires? April 15, 2015Question 22A taxpayer will receive a 30-day letterQuestion 23What are the consequences of classification as a corporateinversion? Question 24In accounting for multinational corporations,Question 25A taxpayer may make the election to either deduct or take acredit for foreign income taxes
Question 1
Which of the following events is an intercompany transaction
that requires the deferral and later recognition of income?
Question 2
Jackson and Tanker Corporations are members of an affiliated
group. The two corporations have been affiliated since they were formed last
year. Both corporations have always used a calendar year as their tax year.
Tanker, the subsidiary, has a separate return year NOL of $14,000 from last
year. Jackson Corporation has a separate return year NOL of $16,000 from last
year. Commencing this year, the two corporations filed a consolidated tax
return. The NOLs can be carried over
.
Question 3
Yong contributes a machine having an adjusted basis of
$20,000 and an FMV of $25,000 for a 10%
$10,000 of
liabilities. As a result of the contribution, Yong must recognize
Question 4
Meg and Abby are equal partners in the AM Partnership, which
earns $40,000 ordinary income, $6,000 long-term
Sec. 1231 loss during the current year. What is the amount and character of
income that must be reported on Abby’s tax return for this year’s partnership
operations?
Question 5
In computing the ordinary income of a partnership, a
deduction is allowed for
Question 6
If a distribution occurs within ________ years of the
contribution date, in a nonliquidating distribution that does not qualify for
Sec. 751 treatment, the distribution event may trigger a precontribution gain
or loss.
Question 7
Ted King’s basis for his interest in the Troy Partnership is
$24,000. In complete liquidation of his interest, King receives cash of $4,000
and real property (not a Sec. 751 asset) having an FMV of $40,000. Troy’s
adjusted basis for this realty is $15,000. Section 736 does not apply. King’s
basis for this realty is
Question 8
Han purchases a 25% interest in the CHOP Partnership from
Huang for $600,000. The partnership has assets with a basis of $1,600,000. What
is the amount of the basis adjustment, if the partnership has a 754 election in
place?
Question 9
Which of the following would terminate a Subchapter S
election?
Question 10
Trusts that can own S corporation stock include all of the
following except
Question 11
Dilley Corporation is an electing S corporation that uses a
calendar year as its tax year. On October 31, Dilley’s S election is terminated
because of the acquisition of stock by an ineligible stockholder. Dilley
Corporation shareholder Alan is allocated an S corporation loss for the year,
which cannot be used because of the basis limitation. Alan will lose the unused
loss if not used by
.
Question 12
Greg transfers property on August 8 of the current year with
an adjusted basis of $40,000 and an FMV of $90,000 to his ex-wife as a property
settlement that is part of their divorce agreement. The property settlement
agreement and the divorce were both finalized on June 3 of the current year.
Greg has made a gift of
Question 13
In 1998, Delores made taxable gifts to her son of property
with an FMV of $200,000. In the current year when Delores dies, the property is
worth $800,000. The amount included in Delores’s estate tax base because of the
1998 gift is
Question 14
Which of the following is a completed gift?
Question 15
A stock redemption to pay death taxes under Sec. 303 is
generally treated as
Question 16
Four years ago, Roper transferred to his son ownership of a
$100,000 life insurance policy that Roper purchased on his own life in 2000.
The cash value of the policy on the transfer date was $25,000. Roper died on
March 1st of this year. The amount included in Roper’s gross estate due to the life insurance policy is
Question 17
If a state has adopted the Revised Uniform Principal and
Income Act, which of the following statements is correct?
Question 18
A simple trust
Question 19
Revocable trusts means
Question 20
Which of the following activities is protected by
accountant-client privilege?
Question 21
On April 15, 2010, a married couple filed their joint 2009
tax return showing gross income of $120,000. Their return was prepared by a
professional tax preparer who mistakenly omitted $45,000 of income, which the
preparer in good faith considered to be nontaxable. No information with regard
to this omitted income was disclosed on the return or attached statements. By
what date must the IRS assert a notice of deficiency before the statute of
limitations expires?
April 15, 2015
Question 22
A taxpayer will receive a 30-day letter
Question 23
What are the consequences of classification as a corporate
inversion?
Question 24
In accounting for multinational corporations,
Question 25
A taxpayer may make the election to either deduct or take a
credit for foreign income taxes
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