When does a corporation initially elect its tax year?

When it first issues common stock

When it files its first corporate return

When the board of directors first meets

When the articles of incorporation are prepared

Which example demonstrates a disadvantage of operating in the S corporation form?

O When the S corporation has large losses in its first year, these losses pass through to the shareholders.

O Shareholders of an S corporation are taxed on their share of corporate earnings regardless of distribution.

O Many deductions, losses and credits are passed through to the shareholders and must be reported on their individual

O An S corporation shareholder must pay self$-$employment tax on any distributions the shareholder receives from the S$.$

A calendar$-$year, accrual$-$basis corporation expects to have $$2,000,000$ in gross income for the current year. it implements a long$-$term bonus program for its employees. To do this, they plan to pay out $$500,000$ in bonuses to their top $20$ outstanding salespeople.

The corporation immediately signs a promise to pay these bonuses to the employees. The bonuses will be paid out in equal annual increments each February for the next four years.

Assuming the corporation has $$600,000$ in other deductions this year, how much will its taxable income for the current year be$?$

$$900\mathrm{.}000$

$$1,275,000$

$$1,500,000$

$$1,875,000$

A June $30$ fiscal$-$year, accrual$-$basis corporation donates $55,000$ cash to a local charity on October $28,2021.$

On which tax return can this corporation deduct the charitable contribution?

June $30,2021$

December $31,2021$

June $30,2022$

December $31,2022$

A corporation has a taxable income of $$100,000.$

What is this corporation's income tax liability?

$$15,000$

$$21,000$

$$25,000$

$$34,000$

How do corporations account for warranty expense for tax purposes?

As an unfavorable temporary adjustment

As a favorable temporary adjustment

As a favorable permanent adjustment

$$As an unfavorable permanent adjustment

How do corporations account for capital gains for tax purposes?

Capital gains are taxed at the corporation's ordinary rates.

Capital gains are taxed at preferential rates.

Capital gains may be carried back three years to offset capital losses.

Capital gains may be carried forward five years to offset capital losses.

What is typically the first step in the audit process for an individual taxpayer?

The taxpayer appears in court for litigation.

The taxpayer and the IRS agent have a meeting.

The IRS agent is provided advice through a technical advice memoranda.

The IRS sends a $90-$day letter letting the taxpayer know of the tax deficiency.