Which of the following would not be subject to the accumulated earnings tax?

a.An accounting corporation with accumulated earnings of $200,000

b.An incorporated medical practice with accumulated earnings of $100,000

c.A manufacturing corporation with accumulated earnings of $500,000 which cannot demonstrate a need for this accumulation

d.A retail corporation with accumulated earnings of $300,000 which cannot demonstrate a reasonable need for any accumulation

Which of the following statements is correct?

a.S corporations file their tax returns on Form 1120.

b.C corporations have a requirement to make estimated payments.

c.The tax return for a calendar year-end C corporation is due on March 15.

d.Corporations may file a 6-month extension for filing their tax returns and paying their tax liability.

For the year ended December 31, 2018, Prunus, Inc., reported book net income of $900,000 after federal income tax expense was recorded on the corporation's books. The corporation also has interest income from tax-exempt securities, interest expense to carry the tax-exempt investment and a capital loss on the sale of land. To arrive at taxable income, which of the following is necessary?

a.Add interest income on tax-exempt municipal securities to the after-tax income.

b.Subtract interest expense on a loan to purchase tax-exempt municipal securities.

c.Deduct the loss on sale of land as an investment.

d.Add the amount of the federal tax expense.

e.All of these responses listed are true.

Which of the following is not likely to appear on Schedule M-1?

a.Federal income tax

b.Utilities expense

c.Tax-exempt interest earned

d.50 percent of meals and entertainment expense

e.Net capital loss

f.The excess of accelerated depreciation used for tax over straight-line depreciation used for book

Which of the following is true regarding the alternative minimum tax (AMT)?

a.The individual AMT was repealed along with the corporate AMT.

b.The amount of the refundable AMT tax credit is equal to 20% of the excess AMT credit for the tax year, over the amount of credit allowable against regular tax liability.

c.AMT credits are not refundable credits for any tax year beginning after 2017 and before 2022.

d.The AMT credits may offset regular tax liability for any future tax year.

Which of the following would not be considered a personal service corporation?

a.A sole proprietor CPA who incorporates his practice

b.A tax preparer with a bookkeeper employee, who incorporates his business

c.A large CPA firm where the principal CPAs own the shares

d.A manufacturing business which is solely owned by an attorney