E Corporation is a subchapter S corporation owned by three individuals with calendar year-ends. The corporation sells a sports drink as its principal product and has similar sales each month. What options does E Corporation have in choosing a tax year? E Corporation may choose any month end as its tax year. Because the owners of E Corporation have tax years ending in December, E Corporation must also choose a December year-end. E Corporation may choose an October, November, or December tax year-end. E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income deferred.

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Answer 1

Textbook Question

Chapter 6, Problem 1MCQ

E Corporation is a subchapter S corporation owned by three individuals with calendar year-ends. The corporation sells a sports drink as its principal product and has similar sales each month. What options does E Corporation have in choosing a tax year?

E Corporation may choose any month end as its tax year.
Because the owners of E Corporation have tax years ending in December, E Corporation must also choose a December year-end.
E Corporation may choose an October, November, or December tax year-end.

E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income deferred.

Expert Solution & Answer

To determine

Concept Introduction:

Gross income is the first step for calculating a taxpayer’s liability. It includes all the income from any sources except those that come under the exception of law. The incomes excluded from the taxationare known as exclusions. These exclusions are available from income such as life insurance, meals, entertainment, gifts and inheritance etc.

To identify: The appropriate tax year option

Answer to Problem 1MCQ

The answer is option “D”

Explanation of Solution

Explanation for correct option:

Option “D” is correct because as per the qualified business income deduction, many individual taxpayers reporting business income from a pass-through entity such as sole proprietorship, partnership, S Corporation, or Limited Liability Company.

Thus, E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income.

Explanation for incorrect options:

Option A is incorrect because the taxpayer does not choose any month-end for the tax year as per the law.
Option B is incorrect because the taxpayer does not choose the same month-end for the tax year as owners.
Option C is incorrect because there must be a certain limitation.

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Students have asked these similar questions

Yellow Diamond Limousines Incorporated operates as a Nevada business. The SUTA wage base for Nevada is $36,600. Yellow Diamond Limousines Incorporated's SUTA tax rate is 3.40%. The employees' annual earnings for the past calendar year are as follows: John $42,400; Evie $55,700; Jason, $29,450; and Alec $52,900.What is Yellow Diamond Limousines Incorporated's SUTA tax liability for the year? A. $4,408.10B. $4,734.50C. $6,135.30D. $1,244.40

Timechex operates as a Nevada business. The employees annual earnings for the past calendar year are as follows: Will, $360,240: Adalia, $36,686: Brian, $21,190: ans Amanda, $6,000. What is Timechex's FUTA tax liability for the year?

Alex Co., a calendar year end corporation, reported pretax income of S40,000 for the first quater of Year 5. The statutory tax rate for Year 5 is 20%. Alex's effective annual income tax rate for Year 4 was 18%. As of the first quarter of Year 5, Alex calculated its first quarter effective tax rate to 15% and estimages its Year ETR will be 12%. What amount should Alex report as income tax expense in its interim income statement for the first quarter of Year 5.

Answer 2

Textbook Question

Chapter 6, Problem 1MCQ

E Corporation is a subchapter S corporation owned by three individuals with calendar year-ends. The corporation sells a sports drink as its principal product and has similar sales each month. What options does E Corporation have in choosing a tax year?

E Corporation may choose any month end as its tax year.
Because the owners of E Corporation have tax years ending in December, E Corporation must also choose a December year-end.
E Corporation may choose an October, November, or December tax year-end.

E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income deferred.

Expert Solution & Answer

To determine

Concept Introduction:

Gross income is the first step for calculating a taxpayer’s liability. It includes all the income from any sources except those that come under the exception of law. The incomes excluded from the taxationare known as exclusions. These exclusions are available from income such as life insurance, meals, entertainment, gifts and inheritance etc.

To identify: The appropriate tax year option

Answer to Problem 1MCQ

The answer is option “D”

Explanation of Solution

Explanation for correct option:

Option “D” is correct because as per the qualified business income deduction, many individual taxpayers reporting business income from a pass-through entity such as sole proprietorship, partnership, S Corporation, or Limited Liability Company.

Thus, E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income.

Explanation for incorrect options:

Option A is incorrect because the taxpayer does not choose any month-end for the tax year as per the law.
Option B is incorrect because the taxpayer does not choose the same month-end for the tax year as owners.
Option C is incorrect because there must be a certain limitation.

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Answer 3

Textbook Question

Chapter 6, Problem 1MCQ

E Corporation is a subchapter S corporation owned by three individuals with calendar year-ends. The corporation sells a sports drink as its principal product and has similar sales each month. What options does E Corporation have in choosing a tax year?

E Corporation may choose any month end as its tax year.
Because the owners of E Corporation have tax years ending in December, E Corporation must also choose a December year-end.
E Corporation may choose an October, November, or December tax year-end.

E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income deferred.

Expert Solution & Answer

To determine

Concept Introduction:

Gross income is the first step for calculating a taxpayer’s liability. It includes all the income from any sources except those that come under the exception of law. The incomes excluded from the taxationare known as exclusions. These exclusions are available from income such as life insurance, meals, entertainment, gifts and inheritance etc.

To identify: The appropriate tax year option

Answer to Problem 1MCQ

The answer is option “D”

Explanation of Solution

Explanation for correct option:

Option “D” is correct because as per the qualified business income deduction, many individual taxpayers reporting business income from a pass-through entity such as sole proprietorship, partnership, S Corporation, or Limited Liability Company.

Thus, E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income.

Explanation for incorrect options:

Option A is incorrect because the taxpayer does not choose any month-end for the tax year as per the law.
Option B is incorrect because the taxpayer does not choose the same month-end for the tax year as owners.
Option C is incorrect because there must be a certain limitation.

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Answer 4

Textbook Question

Chapter 6, Problem 1MCQ

E Corporation is a subchapter S corporation owned by three individuals with calendar year-ends. The corporation sells a sports drink as its principal product and has similar sales each month. What options does E Corporation have in choosing a tax year?

E Corporation may choose any month end as its tax year.
Because the owners of E Corporation have tax years ending in December, E Corporation must also choose a December year-end.
E Corporation may choose an October, November, or December tax year-end.

E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income deferred.

Expert Solution & Answer

To determine

Concept Introduction:

Gross income is the first step for calculating a taxpayer’s liability. It includes all the income from any sources except those that come under the exception of law. The incomes excluded from the taxationare known as exclusions. These exclusions are available from income such as life insurance, meals, entertainment, gifts and inheritance etc.

To identify: The appropriate tax year option

Answer to Problem 1MCQ

The answer is option “D”

Explanation of Solution

Explanation for correct option:

Option “D” is correct because as per the qualified business income deduction, many individual taxpayers reporting business income from a pass-through entity such as sole proprietorship, partnership, S Corporation, or Limited Liability Company.

Thus, E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income.

Explanation for incorrect options:

Option A is incorrect because the taxpayer does not choose any month-end for the tax year as per the law.
Option B is incorrect because the taxpayer does not choose the same month-end for the tax year as owners.
Option C is incorrect because there must be a certain limitation.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Concept Introduction:

Gross income is the first step for calculating a taxpayer’s liability. It includes all the income from any sources except those that come under the exception of law. The incomes excluded from the taxationare known as exclusions. These exclusions are available from income such as life insurance, meals, entertainment, gifts and inheritance etc.

To identify: The appropriate tax year option

Answer to Problem 1MCQ

The answer is option “D”

Explanation of Solution

Explanation for correct option:

Option “D” is correct because as per the qualified business income deduction, many individual taxpayers reporting business income from a pass-through entity such as sole proprietorship, partnership, S Corporation, or Limited Liability Company.

Thus, E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income.

Explanation for incorrect options:

Option A is incorrect because the taxpayer does not choose any month-end for the tax year as per the law.
Option B is incorrect because the taxpayer does not choose the same month-end for the tax year as owners.
Option C is incorrect because there must be a certain limitation.

Answer 8

Expert Solution & Answer

To determine

Concept Introduction:

Gross income is the first step for calculating a taxpayer’s liability. It includes all the income from any sources except those that come under the exception of law. The incomes excluded from the taxationare known as exclusions. These exclusions are available from income such as life insurance, meals, entertainment, gifts and inheritance etc.

To identify: The appropriate tax year option

Answer to Problem 1MCQ

The answer is option “D”

Explanation of Solution

Explanation for correct option:

Option “D” is correct because as per the qualified business income deduction, many individual taxpayers reporting business income from a pass-through entity such as sole proprietorship, partnership, S Corporation, or Limited Liability Company.

Thus, E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income.

Explanation for incorrect options:

Option A is incorrect because the taxpayer does not choose any month-end for the tax year as per the law.
Option B is incorrect because the taxpayer does not choose the same month-end for the tax year as owners.
Option C is incorrect because there must be a certain limitation.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Concept Introduction:

Gross income is the first step for calculating a taxpayer’s liability. It includes all the income from any sources except those that come under the exception of law. The incomes excluded from the taxationare known as exclusions. These exclusions are available from income such as life insurance, meals, entertainment, gifts and inheritance etc.

To identify: The appropriate tax year option

Answer 12

Answer to Problem 1MCQ

The answer is option “D”

Answer 13

Explanation of Solution

Explanation for correct option:

Option “D” is correct because as per the qualified business income deduction, many individual taxpayers reporting business income from a pass-through entity such as sole proprietorship, partnership, S Corporation, or Limited Liability Company.

Thus, E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income.

Explanation for incorrect options:

Option A is incorrect because the taxpayer does not choose any month-end for the tax year as per the law.
Option B is incorrect because the taxpayer does not choose the same month-end for the tax year as owners.
Option C is incorrect because there must be a certain limitation.

Answer 14

Ch. 6 - E Corporation is a subchapter S corporation owned...Ch. 6 - Income and loss from which of the following...Ch. 6 - Which of the following entities is likely to have...Ch. 6 - Which of the following is an acceptable method of...Ch. 6 - Which of the following entities is required to...Ch. 6 - Prob. 6MCQ Ch. 6 - B Corporation, a calendar year-end, accrual basis...Ch. 6 - Prob. 8MCQ Ch. 6 - Prob. 9MCQ Ch. 6 - Prob. 10MCQ

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