11. One way to avoid the double tax on C corporation earnings is to:

1. pay deductible bonuses to shareholders who are employees.
2. pay deductible interest to shareholders who are also creditors.
3. pay deductible rent to shareholders who are also lessors.
4. never pay dividends.
5. all of the above.

12. Fs share of income from various sources is as follows for the current year:

Fs Share of

Entitys Fs Share of

Source Net Income Distributions

ABC Partnership after deducting partners salary $ 8,000 $ 9,000

Fs salary (guaranteed payment) from ABC Partnership n/a 30,000

XYZ Corporation, a C corporation 80,000 40,000

EDF Corporation, an S corporation 40,000 10,000

Fs A.G.I. (ignoring the deduction for onehalf of any selfemployment tax) is how much?

a. $89,000

2. $158,000

c. $118,000

d. $128,000

13. Which of the following is not true of the standard deduction?

a. It is the amount that itemized deductions must be less than before a taxpayer itemizes.

b. It is increased for elderly taxpayers.

c. It is $25,100 for married persons filing jointly for 2021.

4. It is not the same amount for all taxpayers.

____ 14. X, a single taxpayer, has A.G.I. of $60,000 and the following itemized deductions for 2021, before percentage limitations:

Medical expenses (unreimbursed) $5,550

State income taxes 4,400

State and local real property taxes 1,300

Residence interest 3,500

Investment interest 300

(net investment income = $775)

Charitable contributions 1,600

Miscellaneous itemized deductions 1,150

Xs allowable itemized deductions are

a. $12,150.

b. $11,100.

c. $17,800.

4. $16,650.