Homework Answers
1) False - A step-up in basis is applied to the cost basis of property transferred at death. this is not a case of death hence false.
2) False - Tax rate is flat for corporations
3) 10:1 (Debt to equity) - Debt to equity means Total Liabilities / Total Assets
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Answer the following questions: 1. True or False. Purchasing the stock of a corporation that owns...
Identify which of the following statements is false. A) Brown Corporation owns 60% of Clark Corporation...
Identify which of the following statements is false. A) Brown Corporation owns 60% of Clark Corporation and 65% of Davis Corporation. Davis Corporation owns 10% of Clark Corporation, and Clark Corporation owns 10% of Davis Corporation. The remaining stock is owned by an individual shareholder. Brown, Davis, and Clark Corporations are a parent-subsidiary controlled group. B) There are three categories of control groups: parent-subsidiary, brother-sister, and combined. C) The controlled group test is applied on December 31. D) A controlled...
please answer whether the following are true or false 6. A "C"corporation pays tax on long...
please answer whether the following are true or false
6. A "C"corporation pays tax on long term capital gain income at a lower rate than the tax on ordinary income. 7. "C" corporations must use the CASH method of accounting. 8. An individual shareholder receiving a regular dividend from a "C" corporation's EARNINGS AND PROFITS must include the dividend in taxable income. 9. Capital losses of a "C" corporation can only offset capital gain income, they cannot reduce other taxable...
Please answer the following questions as either TRUE or FALSE: a. Stock Options rarely include a...
Please answer the following questions as either TRUE or FALSE: a. Stock Options rarely include a vesting period. b. Restricted stock units have no voting rights. c. A §83(b) election let’s you decide at the start of your vesting agreement to be taxed for the entire present value of the restricted stock granted. d. Incentive stock options (“ISOs”) can be granted to employees. e. Non-qualified stock options (“NSOs”) can be granted to anyone, including employees, consultants and directors. f. Ordinary...
Indicate whether each of the following statements is true or false. Questions with more than one...
Indicate whether each of the following statements is true or false. Questions with more than one answer selected will be marked as incorrect. 1.Under IFRS, contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will actually occur. True False 2. The classification of a liability as current or non-current is important because it may affect the evaluation of a company’s liquidity. True False 3. The liability of a shareholder is usually limited...
Andrea has prepared the following list of statements about corporations. Identify each statement as true or false.
Exercise 13-01 Andrea has prepared the following list of statements about corporations. Identify each statement as true or false. 1. A corporation is an entity separate and distinct from its owners. 2. As a legal entity, a corporation has most of the rights and privileges of a person. 3. Most of the largest U.S. corporations are privately held corporations. Corporations may buy, own, and sell property; borrow money: enter Into legally binding contracts; and sue and be sued. 5. The net income of a corporation is not...
Instructions on lov Identify each statement as true or false. If false, indicate how to correct...
Instructions on lov Identify each statement as true or false. If false, indicate how to correct the statement. ET EXERCISES Identify characteristics of a corporation. (LO 1) Y; enter into legally bind- E11-1 Andrea has prepared the following list of statements about corporations. 1. A corporation is an entity separate and distinct from its owners. 2. As a legal entity, a corporation has most of the rights and privileges of a person 3. Most of the largest U.S. corporations are...
True/False Please explain the answer 1. If a progressive tax rate system is used, as a...
True/False Please explain the answer 1. If a progressive tax rate system is used, as a taxpayer's taxable income decreases, a progressively higher rate of tax is applied. 2. Using retroactive dates for changes in the tax law violates the objective of certainty as identified in Adam Smith's "canons of taxation." 3. Partnerships, S corporations and trusts are all taxpaying entities. 4. If offered a $400 credit or a $1,000 deduction, a taxpayer with a 30% marginal tax rate should...
31. Breezy Corporation is owned 75% by Leticia and 25% by LaShawn. Breezy Corporation owns Cloud Corporation stock...
31. Breezy Corporation is owned 75% by Leticia and 25% by LaShawn. Breezy Corporation owns Cloud Corporation stock with a $45.000 adiusted basis and a $25.000 FMV. The stock 15 not disqualified property. As part of a complete liquidation, the Cloud Corporation stock is distributed to LaShawn. LaShawn's basis in her Breezy stock is $35,000. Breezy Corporation will recognize A) none of the above. B) a $15,000 loss. C) a $25,000 gain. D) no loss. 32. Lake City Corporation owns...
Demarcus is a 50% partner in the DJ partnership. DJ has taxable income for the year...
Demarcus is a 50% partner in the DJ partnership. DJ has taxable income for the year of $200,000. Dernarcus received a $75,000 distribution from the partnership. What amount of income related to DJ must Demarcus recognize? $75,000 $100,000 $37,500 $200,000 Question 21 Corporations are permitted to deduct $3,000 in net capital losses annually. True False Jermaine owns all 200 shares of Peach Corporation stock valued at $50,000. Kenya, a new shareholder, receives 200 newly issued shares from Peach Corporation in...
True or false 30. “Double taxation" refers to the LR.S. first taxing a corporation's revenue and...
True or false
30. “Double taxation" refers to the LR.S. first taxing a corporation's revenue and then its profits. 31. All else the same, the greater the frequency of compounding, the more the proceeds from a given investment amount. 32. If an owner of shares in a company sells some shares to a person who does not own any, it is a primary transaction 33. If an owner of shares in a company sells some shares to another existing owner,...
please answer whether the following are true or false
6. A "C"corporation pays tax on long term capital gain income at a lower rate than the tax on ordinary income. 7. "C" corporations must use the CASH method of accounting. 8. An individual shareholder receiving a regular dividend from a "C" corporation's EARNINGS AND PROFITS must include the dividend in taxable income. 9. Capital losses of a "C" corporation can only offset capital gain income, they cannot reduce other taxable...
Instructions on lov Identify each statement as true or false. If false, indicate how to correct the statement. ET EXERCISES Identify characteristics of a corporation. (LO 1) Y; enter into legally bind- E11-1 Andrea has prepared the following list of statements about corporations. 1. A corporation is an entity separate and distinct from its owners. 2. As a legal entity, a corporation has most of the rights and privileges of a person 3. Most of the largest U.S. corporations are...
31. Breezy Corporation is owned 75% by Leticia and 25% by LaShawn. Breezy Corporation owns Cloud Corporation stock with a $45.000 adiusted basis and a $25.000 FMV. The stock 15 not disqualified property. As part of a complete liquidation, the Cloud Corporation stock is distributed to LaShawn. LaShawn's basis in her Breezy stock is $35,000. Breezy Corporation will recognize A) none of the above. B) a $15,000 loss. C) a $25,000 gain. D) no loss. 32. Lake City Corporation owns...
Demarcus is a 50% partner in the DJ partnership. DJ has taxable income for the year of $200,000. Dernarcus received a $75,000 distribution from the partnership. What amount of income related to DJ must Demarcus recognize? $75,000 $100,000 $37,500 $200,000 Question 21 Corporations are permitted to deduct $3,000 in net capital losses annually. True False Jermaine owns all 200 shares of Peach Corporation stock valued at $50,000. Kenya, a new shareholder, receives 200 newly issued shares from Peach Corporation in...
True or false
30. “Double taxation" refers to the LR.S. first taxing a corporation's revenue and then its profits. 31. All else the same, the greater the frequency of compounding, the more the proceeds from a given investment amount. 32. If an owner of shares in a company sells some shares to a person who does not own any, it is a primary transaction 33. If an owner of shares in a company sells some shares to another existing owner,...
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