Question

For 2018, Sleevo Shirt Corporation had taxable income before the charitable contributions deduction of $10,000 and charitable contributions of $15,000. Sleevo Shirt Corporation may deduct what amount of charitable contributions?

a.$0

b.$10,000

c.$1,000

d.$15,000

Kathy and Irene form Wintercrest Corporation. Kathy contributed cash of $10,000 in exchange for 100 shares of Wintercrest stock. Irene contributed property with a fair market value of $14,000, adjusted basis of $7,000, and subject to a recourse debt of $4,000 which the corporation assumed, for her 100 shares. What is Irene's gain or loss recognized on contribution of the property and what is her basis in her Wintercrest stock?

a.$4,000 gain and $7,000 basis

b.$0 gain and $7,000 basis

c.$0 gain and $10,000 basis

d.$0 gain and $3,000 basis

The Sapote Corporation is a manufacturing corporation. The corporation has accumulated earnings of $500,000 and the corporation cannot establish a reasonable business need for any of that amount. What is the amount of the accumulated earnings tax, if any, that will be imposed on the corporation?

a.$100,000

b.$190,000

c.$50,000

d.$70,000

e.$175,000

Lyndfield Corporation has taxable income from operations of $95,000, a short-term gain of $10,000, and a long-term loss of $15,000. What is Lyndfield's current net taxable income? What happens to an unused capital loss, if there is one?

a.$105,000; No tax benefit for the long-term loss

b.$95,000; $5,000 loss carried back 3 years and forward 5 years as a short-term loss

c.$90,000; $5,000 long-term loss deductible against income

d.$105,000; $15,000 loss carried back 3 years and forward 5 years as a long-term loss

Answer 1

1.For 2018, Sleevo Shirt Corporation had taxable income before the charitable contributions deduction of $10,000 and charitable contributions of $15,000. Sleevo Shirt Corporation may deduct what amount of charitable contributions-

  b.$10,000

2.The Sapote Corporation is a manufacturing corporation. The corporation has accumulated earnings of $500,000 and the corporation cannot establish a reasonable business need for any of that amount. What is the amount of the accumulated earnings tax, if any, that will be imposed on the corporation

(C) $50,000

3.Lyndfield Corporation has taxable income from operations of $95,000, a short-term gain of $10,000, and a long-term loss of $15,000. What is Lyndfield's current net taxable income? What happens to an unused capital loss, if there is one

  (A)$105,000; No tax benefit for the long-term loss