QUESTION 13 P is a publicly held corporation with a subsidiary S of which P has always owned 100 of the outstanding stock P has taxable income of $1,000,000 and S has taxable income of $100,000 a Corporate income tax on P is $340,000 and on S is $22,250 b The tax is as in answer (a ) as long as P and S have consented to an apportionment plan giving 100 of the lower bracket benefits to S c The corporate income tax rate in 2020 will be a flat 35 d None of the above QUESTION 14 Same facts as question 13 and add that S distributed a dividend of $50,000 from its taxable of $100,000 so that P has potential additional taxable income of $50,000 and add that P has not owned S always but the distribution is from E P earned when P owned 100 of S and P owned 100 of S in the year of distribution a Ps taxable income does not increase because of the 100 DRD b P has additional AMT exposure because 80 DRDs are an AMT ACE adjustment c Ps corporate income tax is $340,000 d All of the above e None of the above QUESTION 15 P Corporation is a publicly held corporation which owns 10 of S Corporations stock S Corporation has taxable income of $100,000 and distributes a $50,000 dividend to P P has taxable income of $1,000,000 before the dividend a Ps corporate income tax is $345,100 on $1,015,000 of taxable income S Corporation tax is $22,250 b Ps corporate income tax is $345,100 and Ss corporate income tax is $34,000 c P Corporation owes AMT d None of the above QUESTION 16 E Corporation learns that F Corporation (a large public company) will pay a large dividend so that before the record date E buys 1 share of F for $500, receives a $250 dividend 30 days later, and sells the stock for $250 on the next day a E Corporation has a 70 DRD equal to $175 b E has a $250 capital loss c a and b d None of the above

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QUESTION 13 P is a publicly held corporation with a subsidiary S of which P has always owned 100% of the outstanding stock. P has

QUESTION 13

P is a publicly held corporation with a subsidiary S of which P has always owned 100% of the outstanding stock. P has taxable income of $1,000,000 and S has taxable income of $100,000.

	a.	Corporate income tax on P is $340,000 and on S is $22,250.
	b.	The tax is as in answer (a.) as long as P and S have consented to an apportionment plan giving 100% of the lower bracket benefits to S.
	c.	The corporate income tax rate in 2020 will be a flat 35%.
	d.	None of the above.

QUESTION 14

Same facts as question 13 and add that S distributed a dividend of $50,000 from its taxable of $100,000 so that P has potential additional taxable income of $50,000 and add that P has not owned S always but the distribution is from E&P earned when P owned 100% of S and P owned 100% of S in the year of distribution.

	a.	Ps taxable income does not increase because of the 100% DRD.
	b.	P has additional AMT exposure because 80% DRDs are an AMT ACE adjustment.
	c.	Ps corporate income tax is $340,000.
	d.	All of the above.
	e.	None of the above.

QUESTION 15

P Corporation is a publicly held corporation which owns 10% of S Corporations stock. S Corporation has taxable income of $100,000 and distributes a $50,000 dividend to P. P has taxable income of $1,000,000 before the dividend.

	a.	Ps corporate income tax is $345,100 on $1,015,000 of taxable income. S Corporation tax is $22,250.
	b.	Ps corporate income tax is $345,100 and Ss corporate income tax is $34,000.
	c.	P Corporation owes AMT.
	d.	None of the above.

QUESTION 16

E Corporation learns that F Corporation (a large public company) will pay a large dividend so that before the record date E buys 1 share of F for $500, receives a $250 dividend 30 days later, and sells the stock for $250 on the next day.

a.
E Corporation has a 70% DRD equal to $175.

b.
E has a $250 capital loss.

c.
a and b.

d.
None of the above.