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Federal Taxation
Quiz 17: Corporations: Introduction and Operating Rules
Path 4
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Question 21
True/False
The accumulated earnings and personal holding company taxes are designed to prevent the accumulation of earnings within a corporation.
Question 22
True/False
A calendar year C corporation can receive an automatic 9-month extension to file its corporate return (Form 1120) by timely filing a Form 7004 for the tax year.
Question 23
True/False
On December 31, 2018, Flamingo, Inc., a calendar year, accrual method C corporation, accrues a bonus of $50,000 to its president (a cash basis taxpayer), who owns 75% of the corporation's outstanding stock. The $50,000 bonus is paid to the president on February 4, 2019. For Flamingo's 2018 Form 1120, the $50,000 bonus will be a subtraction item on Schedule M-1.
Question 24
True/False
Schedule M-1 is used to reconcile net income as computed for financial accounting purposes with taxable income reported on the corporation's income tax return.
Question 25
True/False
No dividends received deduction is allowed unless the corporation has held the stock for more than 90 days.
Question 26
True/False
Income that is included in net income per books but not included in taxable income is a subtraction item on Schedule M-1.
Question 27
True/False
The limitation on the deduction of business interest does not apply to noncorporate taxpayers.
Question 28
True/False
Lilac Corporation incurred $4,700 of legal and accounting fees associated with its incorporation. The $4,700 is deductible as startup expenditures on Lilac's tax return for the year in which it begins business.