91 a calendar year corporation has a 15 000 current e p deficit and a 40 000 positiv 4312737

91 a calendar year corporation has a 15 000 current e p deficit and a 40 000 positiv 4312737

91) A calendar-year corporation has a $15,000 current E&P deficit and a $40,000 positive accumulated E&P balance. Also assume that shareholders of the corporation have a total basis in outstanding shares of $30,000. A $75,000 distribution is made to the shareholders on the last day of the year. The tax results to the shareholders will be

A) dividend income of $25,000, a tax-free return of capital of $30,000, and capital gain of $20,000.

B) dividend income of $0, a tax-free return of capital of $30,000, and capital gain of $45,000.

C) dividend income of $25,000, a tax-free return of capital of $5,000, and capital gain of $45,000.

D) dividend income of $40,000, a tax-free return of capital of $30,000, and capital gain of $5,000.

92) Dixie Corporation distributes $31,000 to its sole shareholder, Sally. At the time of the distribution, Dixie's E & P is $25,000 and Sally's basis in her Dixie stock is $10,000. Sally's basis in her Dixie stock after the distribution is

A) $4,000.

B) $10,000.

C) $25,000.

D) $31,000.

93) Blue Corporation distributes land and building having a $70,000 adjusted basis and a $200,000 FMV to its sole shareholder, Marina. Blue has current and accumulated E & P exceeding $100,000. The property is subject to a $120,000 mortgage, which Marina assumes. What is the amount of the taxable dividend received by Marina?

A) $0

B) $70,000

C) $80,000

D) $100,000

94) A corporation distributes land worth $200,000 to its sole shareholder.  The corporation had purchased the land several years ago for $120,000.  The corporation has over $1 million of E&P.  How much income will the corporation and the shareholder recognize?

A)

Corporation

Shareholder

$-0-

$80,000

B)

Corporation

Shareholder

$-0-

$120,000

C)

Corporation

Shareholder

$80,000

$-0-

D)

Corporation

Shareholder

$80,000

$200,000

95) Corkie Corporation distributes $80,000 cash along with land having a $60,000 adjusted basis and a $40,000 FMV to its shareholder Josh. What are the tax consequences to Corkie Corporation?

A) $20,000 loss realized and recognized

B) $20,000 loss realized but not recognized

C) $20,000 gain realized but not recognized

D) $20,000 gain realized and recognized

96) A corporation distributes land with a FMV of $85,000 (basis $50,000). The land has a mortgage of $95,000 assumed by the shareholder. Gain to the corporation is

A) $-0-.

B) $10,000.

C) $35,000.

D) $45,000.

97) A corporation is owned 70% by Jones and 30% by Smith. Jones owns 70 shares with a cost of $100 each. Smith owns 30 shares with a cost of $100 per share. The company redeems 20 shares from Jones at a redemption price of $400 per share. No stock is redeemed from Smith. This is not a redemption to pay death taxes, and it is not a partial liquidation. What is the tax impact on Jones?

A) capital gain of $6,000

B) capital gain of $8,000

C) dividend income of $6,000

D) dividend income of $8,000

98) A corporation is owned 70% by Jones and 30% by Smith. Jones owns 70 shares with a cost of $100 each. Smith owns 30 shares with a cost of $100 per share. Smith and Jones are not related.  The company redeems Smith's 30 shares at a redemption price of $400 per share. No stock is redeemed from Jones. This is not a redemption to pay death taxes, and it is not a partial liquidation. Smith will recognize

A) dividend income of $12,000.

B) dividend income of $9,000.

C) capital gain of $12,000.

D) capital gain of $9,000.

99) A liquidating corporation

A) recognizes gains and losses on the distribution of property.

B) never recognizes gains and losses on the distribution of property.

C) recognizes gains and losses only on the distribution of the specific property contributed in a Section 351 transaction.

D) recognizes gains, but not losses, on the distribution of property.

100) Sun Corporation makes a liquidating distribution of land with a $90,000 adjusted basis and a $100,000 FMV to shareholder Tim, who surrenders his Sun stock to the corporation. Lindsey, another shareholder, received $100,000 cash for her shares. Tim's adjusted basis in the Sun stock is $70,000. Lindsey's adjusted basis in her stock if $110,000. What is the amount of gains and or losses recognized by Tim and Lindsey as a result of these transactions?

A)

Tim

Lindsey

$30,000 gain realized, $0 recognized;

$0 realized loss; $10,000 recognized loss

B)

Tim

Lindsey

$30,000 gain realized & recognized;

$0 realized loss; $10,000 recognized loss

C)

Tim

Lindsey

$30,000 gain realized, $0 recognized;

$10,000 loss realized and recognized

D)

Tim

Lindsey

$30,000 gain realized & recognized;

$10,000 loss realized and recognized

101) When is the due date for the corporate income tax return (with no extensions)?

A) the 15th day of the 4th month following the end of the tax year

B) the 15th day of the 6th month following the end of the tax year

C) the 15th day of the 3rd month following the end of the tax year

D) the 15th day of the 9th month following the end of the tax year

102) Which of the following statements regarding corporate tax return schedules is correct?

A) Schedule M-3 reconciles taxable income with earnings and profits.

B) Schedule M-1 reconciles retained earnings at the beginning of the year to the end of the year amount.

C) Schedule M-2 reconciles book-tax differences.

D) Schedule M-3 reconciles book-tax differences.

103) Which corporations are required to file a Schedule M-3?

A) S corporations with assets of $10,000,000 or more

B) C corporations with assets of $1,000,000 or more

C) publicly-held C corporations with assets of $5,000,000 or more

D) C corporations with assets of $10,000,000 or more

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