Which of the following statements regarding political contributions made by a corporation is CORRECT? O a. Political contributions are allowed as a deduction in the computation of taxable income, therefore they are deducted on Schedule 2. O b. Corporations receive a tax credit equal to 15% of political contributions made in the year. O c. Political contributions are not allowed as a deduction in the computation of business income, therefore they are added back on Schedule 1. d. The total deduction for political contributions is limited to 75% of the corporation's net income in the year.

Which of the following statements regarding political contributions made by a corporation is CORRECT? O a. Political contributions are allowed as a deduction in the computation of taxable income, therefore they are deducted on Schedule 2. O b. Corporations receive a tax credit equal to 15% of political contributions made in the year. O c. Political contributions are not allowed as a deduction in the computation of business income, therefore they are added back on Schedule 1. d. The total deduction for political contributions is limited to 75% of the corporation's net income in the year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

ADetermine the amount of taxable income and separately stated items in each of the cases below. Assuming the corporation is a Subchapter S corporation. Ignore any carryforward items. a. Corporate financial statement net income of $52,000 including tax expense of $15,000, charitable contributions of $3000, and depreciation expense of $37,000, Depreciation expense for tax purposes is $46,000. b. Corporate financial statement net income of $139,000 including tax expense of $68,000, charitable contributions of $28,000, depreciation expense of $103,000, and meals expenses of $31,000. Depreciation expense for tax purposes is $145,000. c. Corporate financial statement: net income of $226,000 including tax expense of $111,000, charitable contributions of $16,000, municipal bond interest of $19,000, meals expense of $41,000, capital gains of $6,000 and depreciation expense of $142,000. Depreciation expense for tax purposes is $131,000, and the corporation has $7000 charitable contribution…
True or False Corporations are required to file a tax return annually regardless of their taxable income.
5
Provide a summary of how tax levies may be imposed on C or S Corporations. Provide a rationale for your responses.
Which of the following statements is incorrect with respect to determining E&P? All tax-exempt income should be added back to taxable income. Dividends received deductions should be added back to taxable income. Charitable contributions in excess of the 10% taxable income limit should be subtracted from taxable income. Federal income tax refunds should be added back to taxable income. None of the above statements are incorrect MY ANSWER: 5. None of the above. Reasoning: All the above statements are correct with regard to the calculation of current E&P. E&P is the ability of the company to pay dividends to its shareholders. Am I correct? If not, please explain. Thank you in advance!
3 What is income tax payable? O A company's liability, based on profitability, that is paid in advance to the government O A payment to a company, based on profitability, that is paid in advance from the government A payment to a company, based on profitability, to be paid from the government O A company's liability, based on profitability, to be paid to the government
Allowable Business Investment Losses (ABIL) can be deductible from any source of income to the taxpayer in a given tax year. Name any two sources of income that ABIL can be deducted from: _____________ and _____________.
In Step 1 the income tax expense of $8,750,000 is correct. The deferred tax liability and income tax payable are incorrect. In Step 2 the net income is correct.
An S corporation is subject to the following tax(es). a.Corporate income tax. b.Built-in gains tax. c.Alternative minimum tax. d.None of these choices are correct.
A-7
Patriot Corporation reports the following results for the current year: View the current year results. Read the requirements. Requirement a. What are Patriot's taxable income and income tax liability for the current year? Begin by computing Patriot's taxable income. (If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero.) Gross income Minus: Taxable income Requirements a. What are Patriot's taxable income and income tax liability for the current year? b. How would your answers to Part a change if Patriot's short-term capital loss is $12,000 instead of $2,000? Print Done - X Current Year Results Gross profits on sales Long-term capital gain Long-term capital loss Short-term capital gain Short-term capital loss Operating expenses Print $ 159,000 7,000 8,000 9,000 2,000 70,000 Done X
Multiple Choice $200,933 $174,983 $208,433 $172,509