Question

Which of the following is not true regarding any corporate AMT credit carryovers that existed at the end of 2017?

a.$The corporate AMT credit carryovers do not expire.

b.The corporate AMT credit carryovers cannot be used to offset tax liability generated in 2018 and thereafter.

c.The corporate AMT credit carryovers can generate a refundable credit of 50% of any unused AMT credits.

d.All of these items listed are true.

At December 31, 2018, Caswell Corporation had the following items regarding its tax return: gross revenue from operations $100,000; cost of goods sold $25,000; operating expenses $30,000; and dividends received from a 50 percent-owned domestic corporation of $30,000. What is Caswell's dividends received deduction?

a.$30,000

b.$5,000

c.$19,500

d.$4,000

For 2018, the Butternut Corporation has net income on its books of $75,000, including the following items:

Net capital losses	$10,000
Federal income tax expense	$22,250

Federal tax depreciation exceeds the depreciation deducted on the books by $7,250. What is the corporation's taxable income?

The Apricot Corporation has regular income tax liability of $13,500.
Apricot has AMT credit carryforwards of $30,000 from prior years. What is Apricot Corporation's remaining AMT credit carryforward after applying the maximum credit against 2018?

a.$30,000

b.$8,250

c.$13,500

d.$16,500

Which of the following is true?

a.Corporate capital losses may be deducted against ordinary income.

b.Corporate capital losses may be used only to offset capital gains.

c.Corporate capital gains are taxed at a capital gains tax rate of 15 percent for 2018.

d.Corporate capital losses not used currently may be carried back 3 years and forward indefinitely until used.

The Dain Corporation, a personal service corporation, has accumulated earnings of $200,000. What is the amount of the accumulated earnings tax imposed on Dain Corporation assuming the accumulation is not necessary to meet the needs of the business?

The Brush Cherry Corporation has a $75,000 loss from operations (excluding dividends received) for 2018, and dividends of $150,000 received from 30 percent-owned domestic corporations. How much is the Brush Cherry Corporation's dividends received deduction for 2018?

a.$45,000

b.$120,000

c.$75,000

d.$97,500

e.None of these amounts listed are true.

Phil forms the Elm Corporation during 2018. He transfers property with a fair market value of $550,000 to Elm Corporation in exchange for 100 percent of the stock in the corporation. Phil's basis in the property transferred was $250,000 and the corporation assumed a $150,000 mortgage on the property. If the fair market value of the stock received by Phil is $400,000, what is the corporation's basis in the property received from Phil and what is Phil's basis in the stock?

a.$100,000 and $100,000

b.$250,000 and $150,000

c.$400,000 and $550,000

d.$100,000 and $400,000

e.$250,000 and $100,000

Answer 1

Q1 - ans C

An entity that paid the AMT received a tax credit (AMT credit carryforward) for the tax paid in excess of the amount owed under the regular tax system. This AMT credit carryforward has no expiration date. ... Any existing AMT credit carryforward can be used to reduce the regular tax obligation in years 2018 through 2020.

Q2 - Ans C

Beginning January 1, 2018, the new tax regime lowers the standard dividends received a deduction from 70 to 50 percent. It also lowers the 80 percent dividends received deduction to 65 percent. i.e 30000*65/100 = 19500

Q3 Ans D 16500 (30000-13500)

Q4 Ans B ) Corporate capital losses may be used only to offset capital gains.

Q5 Ans

amount of the accumulated earnings tax imposed on Dain Corporation assuming the accumulation is not necessary to meet the needs of the business is 20% (15% prior to 2013) of the excess earnings may be assessed.i.e 20% (200000-150000) = $10000

Q6 ans 75000