Question 31.31. Which of the following liabilities would be considered nonrecourse? (Points : 1)

A bank loan for which the taxpayer is personally liable. Credit card debt. A $20,000 real estate loan which allows the bank to take the real estate if the taxpayer stops making payments on the loan. All of the other provided choices are nonrecourse liabilities.

Question 32.32. At the beginning of the year, Joe's basis in his partnership interest was $5,000. During the year, Joe contributed $10,000 in cash to the partnership & signed a bank loan to be personally liable for the partnership's debt of $25,000. For the current year, the partnership allocated a loss of $60,000 to Joe. In the following year, Joe's portion of the partnership income is $30,000. Which of the following is accurate? (Points : 1)

In the following year, Joe's reportable taxable income from the partnership is $10,000. Joe's basis in his partnership at the end of the year is $15,000. Joe may deduct all of the $60,000 loss in the current year. Joe may carry over a $45,000 loss to the following year.

Question 33.33. Which of the following is true about an LLC (Limited Liability Company)? (Points : 1)

A LLC is always treated like a corporation for tax purposes. A LLC must have at least 2 members. A LLC is always taxed like a partnership. A LLC's limited liability is similar to a corporation's. All of the other provided choices are false.

Question 34.34. Which of the following is a disadvantage of an LLC? (Points : 1)

For security law purposes, an ownership interest in an LLC is not necessarily a security. There is no general partner requirement. Taxable income and losses pass through to the owners. The states are not uniform in their treatment of limited liability companies.

Question 35.35. For 2014, what is the maximum tax rate for personal service corporations? (Points : 1)

25% 28% 34% 35% None of the other choices provided

Question 36.36. Which of the following companies is taxed at a flat rate of 35%? (Points : 1)

An auto parts manufacturing corporation with taxable income of $73,000. A consulting corporation of owner-employee CPAs with taxable income of $1,000,000. A family-owned shoe store with earnings of $224,000 in 2013. All of the above are taxed at a flat rate of 35%.

Question 37.37. In 2014, Apricot Corporation had taxable income of $120,000. Included in taxable income was a $10,000 capital gain. The $120,000 of taxable income does not include a $15,000 capital loss carryforward available from the previous year. What is Apricot Corporation's 2014 income tax liability before any tax credits? (Points : 1)

$24,200 $26,150 $28,550 $30,050 None of the other choices provided

Question 38.38. Which of the following statements is true of corporations? (Points : 1)

Income of all corporations is taxed in the same way that income of partnerships is taxed. A corporation's charitable contribution deduction is limited to 25% of the corporation's taxable income. Capital losses of a corporation may be deducted from ordinary income, subject to an annual limitation. If a corporation has a long-term capital loss that is carried back, it is treated as a short-term capital loss. A corporation may deduct organizational expenditures as they are incurred.

Question 39.39. Which of the following is true with respect to capital gains and losses of a corporation? (Points : 1)

A corporation can offset ordinary income with capital losses. A corporation pays 15% long-term capital gains rate, just like an individual. A corporation can carry a capital loss back 5 years. A corporation can carry a capital loss forward 5 years.

Question 40.40. For 2014, the Beech Corporation has net income on its books of $60,000, including the following items: (i) Net capital losses $10,000, (ii) Federal income tax expense $25,000 , & (iii) Federal tax depreciation exceeds the depreciation deducted on the books by $5,000. What is the corporation's taxable income? (Points : 1)

$66,000 $85,000 $90,000 $103,000 None of the other provided choices