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NAME ________________________________________________ Version 1
ACCT 5413 Entity Taxation
Quiz Chapters 2 and 3
1. The domestic production activities deduction (DPAD) is available to organizations with domestic production activities.
Answer: TRUE
2. A corporation can be subject to both the accumulated earnings tax and the personal holding company tax in the same year.
Answer: FALSE
3. The alternative minimum tax is the excess of the tentative minimum tax amount over the regular tax amount.
Answer: TRUE
4. Corporations are permitted to deduct $3,000 in net capital losses annually.
Answer: FALSE
5. A shareholder's basis in property distributed as a dividend is its fair market value.
Answer: TRUE
6. Sparks Corporation receives a dividend of $100,000 from Jill Corporation, a C Corporation. Sparks owns 70% of Jill Corporation stock. Sparks' dividends-received deduction is $80,000.
Answer: TRUE
7. The U.S. production activities deduction is based on a percentage of which of the following?
A) taxable income before the production activities deduction
B) 50% of W-2 wages.
C) qualified production activities income
D) both A and C above
Answer: D
8. Basalt Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1,500,000 for 2013. The company is not a small corporation. If the regular corporate tax is $250,000, Basalt's alternative minimum tax for 2013 is
a.
$42,000
b.
$50,000.
c.
$292,000.
d.
$300,000.
Answer: B
9. Falcon Corporation owns 15% of the stock of Pheasant Corporation, which pays it a dividend of $100,000. Falcon Corporation also owns 25% of the stock of Phoenix Corporation, which pays it a $40,000 dividend. Assuming the taxable income limitation does not apply, how much is Falcon Corporation's dividend received deduction for the year?
a.
$98,000.
b.
$102,000.
c.
$112,000.
d.
$140,000.
Answer: B
10. Pelican
ACCT 5413 Entity Taxation
Quiz Chapters 2 and 3
1. The domestic production activities deduction (DPAD) is available to organizations with domestic production activities.
Answer: TRUE
2. A corporation can be subject to both the accumulated earnings tax and the personal holding company tax in the same year.
Answer: FALSE
3. The alternative minimum tax is the excess of the tentative minimum tax amount over the regular tax amount.
Answer: TRUE
4. Corporations are permitted to deduct $3,000 in net capital losses annually.
Answer: FALSE
5. A shareholder's basis in property distributed as a dividend is its fair market value.
Answer: TRUE
6. Sparks Corporation receives a dividend of $100,000 from Jill Corporation, a C Corporation. Sparks owns 70% of Jill Corporation stock. Sparks' dividends-received deduction is $80,000.
Answer: TRUE
7. The U.S. production activities deduction is based on a percentage of which of the following?
A) taxable income before the production activities deduction
B) 50% of W-2 wages.
C) qualified production activities income
D) both A and C above
Answer: D
8. Basalt Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1,500,000 for 2013. The company is not a small corporation. If the regular corporate tax is $250,000, Basalt's alternative minimum tax for 2013 is
a.
$42,000
b.
$50,000.
c.
$292,000.
d.
$300,000.
Answer: B
9. Falcon Corporation owns 15% of the stock of Pheasant Corporation, which pays it a dividend of $100,000. Falcon Corporation also owns 25% of the stock of Phoenix Corporation, which pays it a $40,000 dividend. Assuming the taxable income limitation does not apply, how much is Falcon Corporation's dividend received deduction for the year?
a.
$98,000.
b.
$102,000.
c.
$112,000.
d.
$140,000.
Answer: B
10. Pelican