South-western Federal Taxation 2018: Individual Income Taxes
41st Edition
ISBN: 9781337385886
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 20, Problem 21DQ
To determine
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Corporations are not without certain disadvantages. Most corporations are taxable entities, and their income is subject to taxation. This "income tax" is problematic as it oftentimes produces double taxation. This effect occurs when shareholders receive cash dividends that they must include in their own calculation of taxable income. O True False
Which of the following statements is true regarding the dividends-received deduction?
The dividends-received deduction is available for dividends received from foreign corporations.
The dividends-received deduction is allowed to provide relief from triple taxation.
Distributions received from S corporations are eligible for the dividends-received deduction.
The stock can be held for only 30 days to be eligible for the dividends-received deduction.
Which of the following statements regarding constructive dividends is not correct? a. Constructive dividends do not need to be formally declared or designated as a
dividend b. Constructive dividends need not be paid pro rata to the shareholders. c. Corporate shareholders that receive constructive dividends may not use the dividends
received deduction. d. Constructive dividends are taxable as dividends
Chapter 20 Solutions
South-western Federal Taxation 2018: Individual Income Taxes
Ch. 20 - Prob. 1DQCh. 20 - LO.1 Sylvia and Trang want to enter into business...Ch. 20 - Prob. 3DQCh. 20 - Prob. 4DQCh. 20 - Prob. 5DQCh. 20 - Prob. 6DQCh. 20 - LO.3, 4, 5 Contrast the income taxation of...Ch. 20 - LO.3, 8, 9 The taxpayer has generated excess...Ch. 20 - Prob. 9DQCh. 20 - Prob. 10DQ
Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - Prob. 15DQCh. 20 - Prob. 16DQCh. 20 - Prob. 17DQCh. 20 - Prob. 18DQCh. 20 - Prob. 19DQCh. 20 - Prob. 20DQCh. 20 - Prob. 21DQCh. 20 - Prob. 22DQCh. 20 - Prob. 23DQCh. 20 - Blaine, Cassie, and Kirstin are equal partners in...Ch. 20 - Prob. 25DQCh. 20 - LO.3 Green Corporation, a calendar year taxpayer,...Ch. 20 - Prob. 27CECh. 20 - Banana Corporation is a May 31 fiscal year...Ch. 20 - LO.4 Gold and Silver are two unrelated calendar...Ch. 20 - Maroon Corporation is a calendar year taxpayer....Ch. 20 - Prob. 32CECh. 20 - Prob. 33CECh. 20 - Prob. 34CECh. 20 - Drab Corporation, a calendar year S corporation,...Ch. 20 - Kim is a 40% shareholder in Taupe Corporation, a...Ch. 20 - Prob. 37CECh. 20 - LO.3, 4, 5 Using the legend provided below,...Ch. 20 - LO.3 Garnet has the following capital asset...Ch. 20 - LO.3, 8 Citron, a calendar year taxpayer, began...Ch. 20 - LO.3 Taupe, a calendar year taxpayer, has a...Ch. 20 - LO.3, 8 Robin had the following capital...Ch. 20 - Prob. 43PCh. 20 - Prob. 44PCh. 20 - Prob. 45PCh. 20 - Prob. 46PCh. 20 - Prob. 47PCh. 20 - Prob. 48PCh. 20 - Prob. 49PCh. 20 - Prob. 50PCh. 20 - Prob. 51PCh. 20 - Prob. 52PCh. 20 - Prob. 53PCh. 20 - Prob. 54PCh. 20 - During the current year, Thrasher (a calendar...Ch. 20 - Prob. 56PCh. 20 - Jim Olsen owns all of the stock in Drake, a...Ch. 20 - Prob. 58PCh. 20 - Prob. 59PCh. 20 - LO.9 The Pheasant Partnership reported the...Ch. 20 - Prob. 61PCh. 20 - Prob. 62PCh. 20 - Prob. 63PCh. 20 - Prob. 1RPCh. 20 - Prob. 2RPCh. 20 - Prob. 3RPCh. 20 - Prob. 5RPCh. 20 - On January 1, year 5, Olinto Corp., an accrual...Ch. 20 - Prob. 2CPACh. 20 - Prob. 3CPACh. 20 - Prob. 4CPACh. 20 - Prob. 5CPACh. 20 - Prob. 6CPACh. 20 - Prob. 7CPA
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Similar questions
- Which of the following is correct? 1 It would be cheaper for ABCL to own and pay for the insurance policies because the corporate earnings in a small business corporation like ABCL are sheltered from tax, therefore the funds required to pay the insurance premiums could come out of completely tax-free corporate earnings. 2 It would be cheaper for ABCL to own and pay for the insurance policies because the company can deduct the premiums paid as a business expense, while the individuals would have to pay the premiums with after-tax dollars. 3 It would be cheaper for ABCL to own and pay for the insurance policies because a portion of corporate earnings in a small business corporation like ABCL are only taxed at around the 20% marginal rate, therefore lesser pre-tax corporate earnings would be required to generate the necessary after-tax funds to pay the insurance premiums. (A) 1 only. (B) 2 and 3 only. (C) 1 and 2 only. (D) 3 only.arrow_forwardA corporation may not deduct dividends paid to shareholders but is permitted to deduct reasonable compensation? True or Falsearrow_forwardDouble taxation of corporate income results because dividend distributions are included in a shareholder’s gross income, but are not deductible by the corporation. True Falsearrow_forward
- Dividends Tax is a tax on the shareholder and it will not form part of the entities tax expense Select one: O True O Falsearrow_forwardAn S corporation avoids taxes at a. none of the choices. b. the corporate level. c. the market level. d. the shareholder levelarrow_forwardIdentify which of the following statements is false. Select one: a. The 50% dividends-received deduction is limited to 50% of the taxable income of the corporation without regard to any NOL deduction, any capital loss carryback, and the dividends-received deduction itself unless the dividends-received deduction produces an NOL. b. Members of an affiliated group can claim a 90% dividends-received deduction for dividends received from other group members that is not subject to a taxable income limitation. c. A corporate dividends-received deduction is not allowed for dividends received on stock held for 40 days. d. All of the above are false.arrow_forward
- The accumulated earnings tax, which is imposed on corporations for the accumulation of earnings in excess of reasonable business needs, does not apply to: a. Closely-held corporations. b. Widely-held corporations. c. Corporations subject to the personal holding company tax. d. Both "Widely-held corporations" and "Corporations subject to the personal holding company tax". e. All of these choices are correct.arrow_forwardDividends are not taxable because these earnings have already been taxed to the corporation.arrow_forwardGrape Corporation makes a nonliquidating distribution of appreciated property to its shareholders. The shareholders will report a gain. The shareholders will report dividend income equal to the basis of the property distributed. The corporation will report a gain. The corporation will report dividend expense equal to the fair value of the property distributed.arrow_forward
- Name some reasons why the taxable income of a corporation is likely not to be the same as its financial statement net income. a Depreciation expense on the tax return is typically greater than depreciation expense for financial statements. b Accounts payable are usually different. c Net assets are usually larger on the tax return. d ales amounts differ because of Internet sales.arrow_forwardWhich of the following statements best describes the purpose of the dividend refund? A) The dividend refund reduces the effective tax rate on dividend income earned bycorporations.B) The dividend refund allows corporations with a balance in their capital dividend account toreduce their tax payable by paying dividends.C) The dividend refund reduces the effective tax rate on dividend income earned byshareholders.D) The dividend refund allows corporations with a balance in their RDTOH accounts to reducetheir tax payable by paying dividends.arrow_forwardPlease help me. Thankyou.arrow_forward
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