Please answer each question and explain why its correct. Show your work please.
QUESTION 1: X Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $2 million for 2016. The company is not a small corporation. If the regular corporate tax is $326,562 X Corporation's alternative minimum tax for 2016 is:
a. $326,562
b. $400,000
c. $73,438
d. $47,000
e. None of these choices are correct.
QUESTION 2: X Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $170,000 for 2016. The company is not a small corporation. If the regular corporate tax is $21,000, X Corporation's alternative minimum tax for 2016 is:
a. $27,000
b. $21,000
c. $135,000
d. $6,000
e. None of these choices are correct.
QUESTION 3: During 2016, X Corporation (a calendar year taxpayer) has $2,000,000 of taxable income, is subject to a tax rate of 34%, and has the following transactions:
|
AMTI (not including adjusted current earnings)
|
$3,000,000
|
|
Adjusted current earnings
|
$4,000,000
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X Corporation's alternative minimum tax (AMT) for 2016 is:
a. $750,000
b. $70,000
c. $500,000
d. $1,360,000
e. None of these choices are correct.
QUESTION 4: In 2016, X Corporation, a calendar year taxpayer, has AMTI (before adjustment for adjusted current earnings) of $8 million. If X Corporation's ACE is $14 million, its tentative minimum tax for 2016 is:
a. $2.75 million
b. $4.2
c. $3.45 million
d. $2.5 million
e. None of these choices are correct.
QUESTION 5: X Corp. manufactures jewelry and is a retail seller of jewelry purchased as inventory that is completely made by other vendors. X Corp. has DPGR of $400,000, QPAI of $320,000, and taxable income of $150,000. Also, W-2 wages related to DPGR are $80,000. What is the allowable DPAD, if any, for 2016?
a. $6,000
b. $9,000
c. $7,170
d. None
e. Some other amount.
QUESTION 6: Taxpayer A and Taxpayer B each own 50% of Corporation X, a calendar year taxpayer. Taxpayer A has a stock basis of $200,000; and Taxpayer B has a stock basis of $200,000. Distributions from Corporation X are: $800,000 to Taxpayer A on May 1 and $200,000 to Taxpayer B on June 1. Corporation X's current E & P is $500,000 and its accumulated E & P is $400,000. How much of the accumulated E & P is allocated to Taxpayer A's distribution?
a. $100,000
b. $400,000
c. $300,000
d. $0
e. None of these choices are correct.
QUESTION 7: Taxpayer A and Taxpayer B each own 50% of Corporation X, a calendar year taxpayer. Taxpayer A has a stock basis of $200,000; and Taxpayer B has a stock basis of $200,000. Distributions from Corporation X are: $800,000 to Taxpayer A on May 1 and $200,000 to Taxpayer B on June 1. Corporation X's current E & P is $500,000 and its accumulated E & P is $400,000. How much of the accumulated E & P is allocated to Taxpayer B's distribution?
a. $100,000
b. $400,000
c. $300,000
d. $0
e. None of these choices are correct.
QUESTION 8: Taxpayer A and Taxpayer B each own 50% of Corporation X, a calendar year taxpayer. Taxpayer A has a stock basis of $200,000; and Taxpayer B has a stock basis of $200,000. Distributions from Corporation X are: $800,000 to Taxpayer A on May 1 and $200,000 to Taxpayer B on June 1. Corporation X's current E & P is $500,000 and its accumulated E & P is $400,000. How much of the current E & P is allocated to Taxpayer A's distribution?
a. $100,000
b. $400,000
c. $300,000
d. $0
e. None of these choices are correct.
QUESTION 9: Taxpayer A and Taxpayer B each own 50% of Corporation X, a calendar year taxpayer. Taxpayer A has a stock basis of $200,000; and Taxpayer B has a stock basis of $200,000. Distributions from Corporation X are: $800,000 to Taxpayer A on May 1 and $200,000 to Taxpayer B on June 1. Corporation X's current E & P is $500,000 and its accumulated E & P is $400,000. How much of the current E & P is allocated to Taxpayer B's distribution?
a. $100,000
b. $400,000
c. $300,000
d. $0
e. None of these choices are correct.
QUESTION 10: Taxpayer A and Taxpayer B each own 50% of Corporation X, a calendar year taxpayer. Taxpayer A has a stock basis of $200,000; and Taxpayer B has a stock basis of $200,000. Distributions from Corporation X are: $800,000 to Taxpayer A on May 1 and $200,000 to Taxpayer B on June 1. Corporation X's current E & P is $500,000 and its accumulated E & P is $400,000. How much, if any, return of capital does Taxpayer A recognize?
a. $100,000
b. $400,000
c. $300,000
d. $0
e. None of these choices are correct.