ONLY ANSWER IF YOU HAVE PREVIOUS RATING AND HISTORY. NEED ANSWER WITHIN NEXT 30 MINTUES

Question 1

In January 2015, Wanda transferred machinery worth $200,000 (adjusted basis of $30,000) to a controlled corporation, Oriole, Inc. The transfer qualified under 351. Wanda had deducted $165,000 of depreciation on the machinery while it was used in her proprietorship. Later in 2015, Oriole sells the machinery for $190,000. What are the tax consequences to Oriole on the sale of the machinery?

	a.	There are no tax consequences to Oriole.
	b.	Oriole has ordinary income under 1245.
	c.	Oriole cannot sell the machine until it is fully depreciated.
	d.	Oriole has a taxable gain of $190,000 on the sale of the machinery.
	e.	None of the above.

Question 2

No gain or loss is recognized by either the shareholder or the corporation on the transfer of assets to a corporation if the transferees' ownership in the corporation is at least 50% after the transfer.

True

False

Question 3

Albert transfers land (basis of $140,000 and fair market value of $320,000) to Gold Corporation for 80% of its stock and a note payable in the amount of $80,000. Gold assumes Alberts mortgage on the land of $200,000.

	a.	Albert has a recognized gain on the transfer of $180,000.
	b.	Albert has a recognized gain on the transfer of $80,000.
	c.	Albert has a recognized gain on the transfer of $60,000.
	d.	Gold Corporation has a basis in the land of $280,000.
	e.	None of the above.

Question 4

Schedule M-1 of Form 1120 is used to reconcile financial net income with taxable income reported on the corporations income tax return as follows: net income per books + additions subtractions = taxable income. Which of the following items is a subtraction on Schedule M-1?

	a.	Book depreciation in excess of tax depreciation.
	b.	Excess of capital losses over capital gains.
	c.	Payments on key employee life insurance.
	d.	Income subject to tax but not recorded on the books.
	e.	None of the above.

Question 5

Red Corporation, which owns stock in Blue Corporation, had net operating income of $200,000 for the year. Blue pays Red a dividend of $40,000. Red takes a dividends received deduction of $28,000. Which of the following statements is incorrect?

	a.	Reds dividends received deduction is 70% of the dividend received.
	b.	Red owns 20% or more, but less than 80% of Blue Corporation.
	c.	The 70% dividends received deduction applies if ownership is less than 20%.
	d.	Red owns less than 20% of Blue Corporation.
	e.	None of the above.

Question 6

Hazel transferred the following assets to Starling Corporation.

	Adjusted Basis	Fair Market Value
Cash	$120,000	$120,000
Machinery	48,000	36,000
Land	108,000	144,000

In exchange, Hazel received 50% of Starling Corporations only class of stock outstanding. The stock has no established value. However, all parties believe that the value of the stock Hazel received is the equivalent of the value of the assets she transferred. The only other shareholder, Rick, formed Starling Corporation five years ago.

	a.	Hazel has no gain or loss on the transfer.
	b.	Hazel has a basis of $276,000 in the stock of Starling Corporation.
	c.	Starling Corporation has a basis of $36,000 in the machinery and $108,000 in the land.
	d.	Hazel has a basis of $300,000 in the stock of Starling Corporation.
	e.	None of the above.

Question 7

Which of the following statements correct regarding the taxation of C corporations?

	a.	The marginal tax rate brackets for corporations are not adjusted for inflation.
	b.	Taxable income of a personal service corporation is taxed at a flat rate of 35%.
	c.	A tax return must be filed whether or not the corporation has taxable income.
	d.	The highest corporate marginal tax rate is 39%.
	e.	None of the above.

Question 8

Three individuals form Skylark Corporation with the following contributions: Cliff, cash of $50,000 for 50 shares; Brad, land worth $20,000 (basis of $11,000) for 20 shares; and Ron, cattle worth $9,000 (basis of $6,000) for 9 shares and services worth $21,000 for 21 shares.

	a.	These transfers are fully taxable and not subject to 351.
	b.	Rons basis in his stock is $6,000.
	c.	Cliff's basis in his stock is $5,000.
	d.	Brads basis in his stock is $11,000.
	e.	None of the above.

Question 9

Rick transferred the following assets and liabilities to Warbler Corporation.

	Adjusted Basis	Fair Market Value
Building	$210,000	$225,000
Equipment	45,000	75,000
Trucks	15,000	30,000
Mortgage (held for four years) on building	30,000	30,000

In return, Rick received $75,000 in cash plus 90% of Warbler Corporations only class of stock outstanding (fair market value of $225,000). Which statement is correct?

	a.	Ricks basis in the Warbler Corporation stock is $225,000 .
	b.	Rick has a realized and recognized gain of $75,000.
	c.	Ricks basis in the stock of Warbler Corporation is $270,000.
	d.	Warbler Corporations basis in the property transferred is $270,000.
	e.	None of the above.

Question 10

Wade and Paul form Swan Corporation with the following investments. Wade transfers machinery (basis of $40,000 and fair market value of $100,000), while Paul transfers land (basis of $20,000 and fair market value of $90,000) and services rendered (worth $10,000) in organizing the corporation. Each is issued 25 shares in Swan Corporation. With respect to the transfers:

	a.	Wade has no recognized gain; Paul recognizes income/gain of $80,000.
	b.	Neither Wade nor Paul has recognized gain or income on the transfers.
	c.	Swan Corporation has a basis of $20,000 in the land transferred by Paul.
	d.	Paul has a basis of $20,000 in the 25 shares he acquires in Swan Corporation.
	e.	None of the above.