ACC 565 WEEK 11 FINAL EXAM – STR
Follow below link to get this tutorial:
Contact us at:
ACC 565 WEEK 11 FINAL EXAM – STR
Parent and Subsidiary Corporations have filed
calendar-year consolidated tax returns for several years. Parent Corporation
uses the cash method of accounting while Subsidiary Corporation uses the
accrual method of accounting. If Parent lends Subsidiary money,
Answer
|
|
the interest expense
is deductible when accrued.
|
|
|
|
the interest expense
and interest income may be reported in different consolidated return years.
|
|
|
|
the interest income
is reported when the interest expense is accrued by Subsidiary.
|
|
|
|
the interest expense
deduction is taken when Parent reports the interest income.
|
A consolidated return’s tax liability is owed
by
Answer
|
|
all group members in
equal portions.
|
|
|
|
the group member
responsible for that portion of the tax liability.
|
|
|
|
all group members
who are severely liable.
|
|
|
|
the parent
corporation.
|
Albert contributes a Sec. 1231 asset to a
partnership on June 1 of this year in exchange for a 10% partnership interest.
He had purchased the asset on March 1, 2002. His holding period for the
partnership interest begins
Answer
|
|
March 1, 2002.
|
|
|
|
March 2, 2002.
|
|
|
|
June 1 of the
current year.
|
|
|
|
June 2 of the
current year.
|
Meg and Abby are equal partners in the AM
Partnership, which earns $40,000 ordinary income, $6,000 long-term capital gain
(LTCG), and $2,000 Sec. 1231 loss during the current year. What is the amount
and character of income that must be reported on Abby’s tax return for this
year’s partnership operations?
Answer
|
|
$20,000 ordinary
income, $3,000 LTCG, $1,000 Sec. 1231 loss
|
|
|
|
$19,000 ordinary
income, $3,000 LTCG
|
|
|
|
$23,000 ordinary
income, $1,000 Sec. 1231 loss
|
|
|
|
$22,000 ordinary
income
|
Allen contributed land, which was being held
for sale to Allen’s customers, to a partnership in exchange for a 20% interest.
The partnership uses the land in its business for three years and then sells
the property. When the property was contributed, it had a basis in Allen’s
hands of $500,000 and an FMV of $600,000. The partnership sells the land for
$700,000. The gain reported by the partnership is
Answer
|
|
$100,000 of ordinary
income and $100,000 of Sec. 1231 gain.
|
|
|
|
$100,000 of Sec.
1231 gain and $100,000 of capital gain.
|
|
|
|
$200,000 of ordinary
income.
|
|
|
|
$200,000 of Sec.
1231 gain.
|
The AB Partnership has a machine with an FMV
of $25,000 and a basis of $20,000. The partnership has taken an $8,000
depreciation on the machine. The unrealized receivable related to the machine
is
Answer
|
|
$0.
|
|
|
|
$5,000.
|
|
|
|
$8,000.
|
|
|
|
$20,000.
|
The definition of “inventory” for purposes of
Sec. 751 includes
Answer
|
|
cash.
|
|
|
|
land held for
investment.
|
|
|
|
marketable
securities not held by dealers.
|
|
|
|
depreciation
recapture potential on Sec. 1231 assets.
|
An S corporation is not treated as a
corporate taxpayer with respect to which one of the following fringe benefits?
Answer
|
|
stock options
|
|
|
|
qualified retirement
plans
|
|
|
|
group term life
insurance premiums
|
|
|
|
nonqualified
deferred compensation
|
Which one of the following individuals or
entities is ineligible to be an S corporation shareholder?
Answer
|
|
an estate
|
|
|
|
resident alien of
the United States
|
|
|
|
a voting trust where
all of the beneficiaries are U.S. citizens
|
|
|
|
a partnership where
all of the partners are U.S. citizens
|
The recognition period for the built-in gains
tax extends for how many years after the S election takes effect?
Answer
|
|
one year
|
|
|
|
three years
|
|
|
|
five years
|
|
|
|
ten years
|
In 1998, Delores made taxable gifts to her son
of property with an FMV of $200,000. In the current year when Delores dies, the
property is worth $800,000. The amount included in Delores’s estate tax base
because of the 1998 gift is
Answer
|
|
$0.
|
|
|
|
$189,000.
|
|
|
|
$200,000.
|
|
|
|
$800,000.
|
Hu makes a gift of his home to a local
homeless shelter (a 501(c)(3) charity). Hu will retain his home for 10 years,
after which the homeless shelter will take possession. The value of Hu’s
10-year interest is $30,000 and the remainder interest is valued at $120,000.
Which of the following statements is correct?
Answer
|
|
Hu is allowed a
charitable deduction on his gift tax return for $150,000 in the current year.
|
|
|
|
Hu is allowed an
exclusion of $12,000 on his gift of $120,000 to the charity.
|
|
|
|
Hu is not allowed to
deduct the contribution until the charity takes possession in 10 years.
|
|
|
|
Hu has a charitable
contribution deduction of $120,000 on his current gift tax retur
|
Gordon died on January 1 and by his will left
land with an adjusted basis of $60,000 and an FMV of $100,000 to Becky. Becky
disclaims the property on December 31 of the year of death, when the land was
still worth $100,000. Becky has made a gift (before the annual gift tax
exclusion) of
Answer
|
|
$100,000.
|
|
|
|
$60,000.
|
|
|
|
$50,000.
|
|
|
|
$0.
|
In 2012, Paul transfers $1,000,000 to a trust
benefiting his three children. As trustee, he has the power to determine the
amount of distributions each year. Paul dies in the current year when the trust
has a value of $1,200,000. How much of the trust’s value is included in Paul’s
estate?
Answer
|
|
$0
|
|
|
|
$400,000
|
|
|
|
$1,000,000
|
|
|
|
$1,200,000
|
Following are the fair market values of
Wilma’s assets at her date of death:
|
Personal effects and
jewelry
|
$150,000
|
|
Land which Wilma
bought and held as a jointtenant with right of survivorship with her sister
|
800,000
|
The executor of Wilma’s estate did not elect
the alternate valuation date. The amount includible in Wilma’s gross estate is
Answer
|
|
$150,000.
|
|
|
|
$550,000.
|
|
|
|
$800,000.
|
|
|
|
$950,000.
|
Four years ago, David gave land to Mike that
he purchased for $70,000, which is presently worth $100,000. Three years ago,
Mike exchanged the land (then worth $150,000) along with a $100,000 cash
contribution made by David for a new piece of land worth $250,000. The new land
is titled with David and Mike as joint tenants with the right of survivorship.
When Mike dies this year, the land is worth $300,000. Mike’s estate will
include
Answer
|
|
$0.
|
|
|
|
$150,000.
|
|
|
|
$180,000.
|
|
|
|
$300,000.
|
Administration expenses incurred by an estate
Answer
|
|
are deductions in
respect of a decedent and may be deducted on both the estate tax return (Form
706) and the estate income tax return (Form 1041).
|
|
|
|
an executor must
elect where to deduct administration expenses (Form 706 or
Form 1041). |
|
|
|
such expenses are
only deductible on Form 706.
|
|
|
|
such expenses are
only deductible on Form 1041
|
The conduit approach for fiduciary income tax
means
Answer
|
|
the distributed
income has the same character in the hands of the beneficiary as it has to
the trust.
|
|
|
|
the distributed
income goes to all beneficiaries proportionately.
|
|
|
|
the distributed
income is determined by the trustee annually.
|
|
|
|
the distributed
income of a remainder interest is determined by the property.
|
Which of the following activities is protected
by accountant-client privilege?
Answer
|
|
written
communications between a CPA and a corporation regarding a tax shelter
|
|
|
|
communications
related to tax return preparation
|
|
|
|
communications
related to criminal tax evasion
|
|
|
|
advice given
regarding tax issues in a divorce
|
Terry files his return on March 31. The return
shows taxes of $6,000, and Terry pays this entire amount when he files his
return. By what time must he file a claim of refund?
Answer
|
|
the later of two
years from the return filing or three years from the date the tax is paid
|
|
|
|
the later of three
years from the return due date or two years from the date the tax is paid
|
|
|
|
two years from the payment
of tax date, if the IRS mails a notice of deficiency in the third year
following the due date of the return
|
|
|
|
four years from the
payment of tax date, if the IRS mails a notice of deficiency
|
Gerald requests an extension for filing his
last year’s individual income tax return. His tax liability is $10,000, of
which $8,000 was withheld, leaving a balance due of $2,000 when he files on
August 1 of the current year. His penalty for failure to pay the tax on time is
Answer
|
|
$0.
|
|
|
|
$40.
|
|
|
|
$300.
|
|
|
|
$400.
|
U.S. citizen Barry is a bona fide resident of
a foreign country for all of 2013. Barry uses a calendar year as his tax year
and receives $158,000 in salary and allowances from his employer. Included in
the $158,000 is a $25,000 housing allowance. Barry’s housing costs are $30,000.
The base housing amount for the current year is $15,616. What amount related to
his housing can Barry exclude on his Form 2555?
Answer
|
|
$14,384
|
|
|
|
$25,000
|
|
|
|
$30,000
|
|
|
|
$13,545
|
U.S. citizen who has a calendar tax year
establishes a tax home and residence in a foreign country and qualifies for the
foreign-earned income exclusion for 60 days in 2010; 365 days in 2011; and 60
days this year, 2012. The maximum earned income exclusion for this year is?
Answer
|
|
$13,733
|
|
|
|
$16,044
|
|
|
|
$13,151
|
|
|
|
$17,522
|
What are the carryback and carryforward
periods for the foreign tax credit?
Answer
|
|
back two years;
forward five years
|
|
|
|
back three years;
forward ten years
|
|
|
|
back one year;
forward ten years
|
|
|
|
back two years; forward
twenty years
|
Charitable contributions made by a fiduciary
Answer
|
|
are limited to 50%
of fiduciary income.
|
|
|
|
must be authorized
in the trust instrument in order to be deductible.
|
|
|
|
flows through to be
deducted on the beneficiary’s tax return.
|
|
|
|
are subject to the
2% floor.
|
Administration expenses incurred by an estate
Answer
|
|
are deductions in
respect of a decedent and may be deducted on both the estate tax return (Form
706) and the estate income tax return (Form 1041).
|
|
|
|
an executor must
elect where to deduct administration expenses (Form 706 or
Form 1041). |
|
|
|
such expenses are
only deductible on Form 706.
|
|
|
|
such expenses are
only deductible on Form 1041.
|
No comments:
Post a Comment