please ans the attachment file

Which of the following statements is correct?

a.A calendar year corporation must file its tax return no later than April 15 unless it requests an extension.

b.A corporation is a legal entity that is taxed on its taxable income.

c.Corporations choose their tax year in their first year of operation and can elect to change it in their third year of operation.

d.Large corporations without inventory can choose to use either the cash or accrual method of accounting.

2.A corporation has a fiscal year-end of June.If the corporation does not receive an automatic extension of time to file its return, the return will be due on the 15^th of:

a.August.

b.September.

c.October.

d.November.

3.Two individuals form a corporation and own all of its stock.One individual contributes cash, and the other contributes property encumbered by a mortgage.The new corporation assumes the mortgage.Which of the following statements is true with respect to the individual who contributes the property?

a.Because the 80% test is met, no gain or loss will be recognized.

b.Gain is recognized to the extent of relief of liability.

c.Gain is recognized to the extent of relief of liability in excess of the basis of property contributed.

d.Gain is recognized to the extent the fair market value of the stock exceeds the basis of the property contributed.

4.Tameka and Janelle form a corporation in which each will own 50% of the stock.Tameka contributes $50,000 in cash.Janelle contributes property with a basis of $30,000 and an FMV of $60,000.She receives $10,000 of inventory from the corporation.Which of the following statements is true?

a.Janelle will report a gain of $10,000.

b.Janelle will report a gain of $30,000.

c.Tameka will report a gain of $10,000.

d.Neither Tameka nor Janelle will report a gain or loss as a result of these transactions.

5.Svetlana forms a corporation in which she is the sole shareholder.She contributes a vehicle with a basis of $15,000 and an FMV of $8,000 in exchange for stock.She also contributes cash of $2,000.Svetlana will recognize:

a.A $5,000 loss.

b.A $7,000 loss.

c.A $10,000 loss.

d.Neither a gain nor loss.

6.Annabelle forms a corporation in which she is the sole shareholder.She transfers $20,000 cash plus land with a $100,000 adjusted basis and a $160,000 FMV in exchange for all the stock of the corporation.The corporation assumes the $140,000 mortgage on the land.What is her basis in the stock, and what is the gain she must report (if any)?

a.No gain; stock basis is $120,000.

b.Gain of $20,000; stock basis is $120,000.

c.No gain; stock basis is $100,000.

d.Gain of $20,000; stock basis is zero.

7.Mountain Company owns 10% of Valley Company.Both are domestic corporations.Valley pays a $60,000 dividend to Mountain.What amount of dividend income will be included in the taxable income of Mountain Company?

a.$6,000.

b.$12,000.

c.$18,000.

d.$60,000.

8.For Subchapter C corporations, which of the following statements is true?

a.Capital losses can be carried back 3 years and then carried forward 5 years.

b.Corporations can elect to forego the carryback period for capital losses and only carry the losses forward.

c.Capital losses can be carried back 2 years and then carried forward 20 years.

d.Capital losses are permitted up to $3,000 per year.

9.Which of the following statements is false?

a.A corporation with average sales in excess of $5,000,000 must use the accrual method of accounting.

b.The charitable contributions of a corporation may be limited.

c.A corporation may be entitled to a deduction for dividends received from other domestic corporations.

d.Passive loss rules apply to all corporations.

10.A calendar year corporate taxpayer must make its final estimated tax payment on the 15^th of which month?

a.November.

b.December.

c.January.

d.February.

11.Which, if any, of the following statements concerning the shareholders of a Subchapter C corporation is correct?

a.Shareholders are taxed on their proportionate share of earnings and profits as they are earned.

b.Shareholders are taxed on distributions from corporate earnings and profits.

c.Shareholders are never taxed on earnings and profits or distributions from the corporation.

d.None of these statements are correct.

12.Parker Company has earnings and profits of $8,000.It distributes capital gain property with a basis of $2,000 and FMV of $9,000 to Gertrude Parker, its sole shareholder.Gertrude has a basis of $10,000 in her stock.Which of the following statements is true with respect to this transaction?

a.Gertrude will report dividend income of $2,000 and a capital gain of $7,000.

b.Gertrude will report dividend income of $8,000.

c.Gertrude will report dividend income of $8,000 and a nontaxable distribution of $1,000.

d.Gertrude will report dividend income of $9,000.

13.Which of the following is a negative adjustment on Schedule M-1?

a.Federal income tax.

c.Charitable contributions in excess of the 10% limit.

c.Depreciation for books in excess of depreciation for taxes.

d.Tax-exempt interest income.

14.Which of the following is a positive adjustment on Schedule M-1?

a.Excess of capital losses over capital gains.

b.Excess of capital gains over capital losses.

c.Charitable contribution carryover to the current year.

d.Depreciation for taxes in excess of depreciation for books.

15.Banana Company is widely held.It owns 85% of Strawberry Corporation.Two individuals hold the remaining 15%.Which of the following statements is true?

a.Banana and Strawberry must file a consolidated tax return.

b.Banana and Strawberry can elect to file a consolidated tax return.

c.Banana and Strawberry can file a consolidated tax return if the other owners of Strawberry agree.

d.Banana and Strawberry are brother-sister corporations.

16.What missing dollar amounts are correct in the following sentence?The AMT exemption is $_____ for corporations with AMT income of $______ or less.

a.$40,000; $150,000.

b.$40,000; $310,000.

c.$150,000; $310,000.

d.The question cannot be answered with the information given.

17.Which of the following items increase basis for a stockholder of a Subchapter S corporation?

a.Capital contributions.

b.Charitable contributions.

c.Net losses.

d.Distributions from the corporation.

18.Which of the following statements is incorrect?

a.An S corporation can own stock of a C corporation.

b.A C corporation can own stock of an S corporation.

c.An S corporation can be a partner in a partnership.

d.An estate can own stock of an S corporation.

19. Which, if any, of the following statements concerning the shareholders of a Subchapter S corporation is correct?

a.Shareholders are taxed on their proportionate share of earnings that are distributed.

b.Shareholders are taxed on the distributions from the corporation.

c.Shareholders are taxed on their proportionate share of earnings whether or not distributed.

d.None of these statements is correct.

20.Chen received a $10,000 dividend from a Subchapter C corporation.He also owns a 50% interest in a Subchapter S corporation that reported $100,000 of taxable income.He received a distribution of $20,000 from the Subchapter S corporation.How much income will Chen report as a result of these events?

a.$30,000.

b.$40,000.

c.$60,000.

d.$80,000.

Problems

1.When a corporation is formed, in certain cases the transferor may report a gain.What are the instances in which a gain would be reported?In these cases, what is the basis of the stock held by the transferor?

2.An individual contributes property with an FMV in excess of basis to a corporation in exchange for stock.The property is subject to a mortgage.In each of the following instances, determine the basis of the stock in the hands of the shareholder and the basis of the property contributed in the hands of the corporation.Assume that the 80% rule is met.

a.The property is subject to a mortgage that is less than basis and the corporation assumes the mortgage.

b.The property is subject to a mortgage that is more than basis and the corporation assumes the mortgage.

3.Determine the basis of stock in the hands of the shareholder in each of the following instances.Assume that the 80% rule is met in all cases.

a.Contribution of property with a basis of $1,000 and an FMV of $1,400.

b.Contribution of property with a basis of $3,000 and an FMV of $3,800.The stockholder also received $500 cash from the corporation as part of the stock transaction.

c.Contribution of property with a basis of $8,200 and an FMV of $12,500.The stockholder also received property with an FMV of $1,700 from the corporation as part of the stock transaction.

d.Contribution of a building with an FMV of $200,000, a mortgage (assumed by the corporation) of $100,000, and a basis of $125,000.

e.Contribution of a building with an FMV of $1,700,000, a mortgage (assumed by the corporation) of $1,000,000, and a basis of $635,000.

4.Using the information from Problem 47, determine the basis of the property contributed in the hands of the corporation in each instance.Assume that the 80% rule is met in all cases.

5. Explain the operation of the dividends received deduction.

6.Determine the amount of dividends received deduction in each of the following instances.In all cases, the net income figure includes the full dividend.

a.Dividend of $10,000 from a 45% owned corporation; taxable income before DRD of $50,000.

b.Dividend of $19,000 from a 15% owned corporation; taxable income before DRD of $75,000.

c.Dividend of $22,000 from a 60% owned corporation; taxable income before DRD of $11,000.

d.Dividend of $8,000 from a 10% owned corporation; taxable income before DRD of $7,000.