1.What is a benefit of a general partnership over a corporation?

A.Limited liability

B.All of the above

C.Avoidance of double taxation

D.A separate and distinct taxpayer from the individual owner

2.Chip and Dale jointly organize Rescue Rangers Inc. Chip transfers his property with a basis of $150 and a FMV of $200 to X in exchange for half of Xs stock. Dale transfers $150 in cash to X in exchange for the other half of Xs stock. What will Chip and Dale recognized as a gain in this transaction?

A.Chip: 50, Dale: 150

B.Chip: 0, Dale: 0

C.Chip: 0, Dale:150

D.Chip: 200, Dale:150

3.Company A has declared a dividend of $100. Company A has $50 of accumulated E&P and $150 of current E&P. How will the E&P be impacted because of the distribution?

A.Accumulated E&P will remain the same and Current E&P will stay the same because Company A can pay a dividend without impacting E&P because their income was greater than $100 in the current year

B.Accumulated E&P will be reduced to $25 and Current E&P will be reduced to $75

C.Accumulated E&P will stay the same and Current E&P will be reduced to $50

D.Accumulated E&P will be reduced to $0 and Current E&P will be reduced to $100

4.Peter files a tax return for a client. The income is significantly different that the previous years and Peter discusses with the client why the income is so much lower. The client tells Peter that he will pay him triple to file the return with the lower income numbers and Peter agrees. What can be the impact to Peter?

A.Censure

B.Nothing, because Peter was correct to rely on his client and accept the additional fees

C.Penalties for willful understatement and negligence

D.Both A and B

5.Corporation X receives an acre of land from Company Y, a related entity. At the time of the transfer the land had a FMV of $8,000 and adjusted basis of $10,000. Company Y purchased the land for $3,000. If Corporation X sells the land for $12,000, what is the recognized gain?

$2,000

$12,000

$9,000

$4,000

6.Peter and Jack equally own Snail LLP. Snail LLP makes $300,000 in year one with $100,000 in deductible expenses. What is the tax impact to Snail LLP?

Group of answer choices

Tax payments on $0

Tax payments on $300,000

Tax payments on $150,000

Tax payments on $200,000