ACCT 560 – Advanced Studies In Federal Taxes And Management Decisions

Keller Graduate

Multiple Choice

1. Question: (TCO A) Tax evasion is when a taxpayer
2. Question: (TCO B) Due to his negligence, James underpaid his taxes for the current year by $40,000. His penalty was
3. Question: (TCO C) In the current year, Casper Inc. had gross income from sales of $210,000, business expenses of $140,000, and dividend income from a 15%-owned U.S. corporation of $90,000. Casper’s dividends-received deduction was
4. Question : (TCO D) Which of the following statements about property distributions in complete liquidations with liabilities in excess of fair market value is true?
5. Question : (TCO E) Which of the following is not a tax preference item for purposes of the alternative minimum tax?
6. Question : (TCO F) A transaction whereby one corporation issues its voting stock to acquire all the stock of another corporation is
7. Question : (TCO D) A distribution to the shareholders of stock in the distributor constitutes a taxable dividend, except for which of the following?
8. Question : (TCO F) Two manufacturing corporations transfer all their assets and liabilities to a new corporation. All old shareholders receive new stock equal in value to their old stock. This is a

Explanatory

1. Question: (TCO A) Describe three of the six accuracy-related penalties.
2. Question: (TCO B) Judy Jones gives a painting to a church and takes a charitable contribution in the amount of $150,000. If the actual value was only $50,000 and if the tax underpayment is $40,000, how much valuation overstatement penalty should she pay?
3. Question 3: (TCO C) What is a sole proprietorship, and what are the advantages of forming one?
4. Question : (TCO D) Tandem Inc. adopts a plan of complete liquidation. Ned Turner, who has a basis in his stock of $16,000, receives a pickup truck originally purchased for $22,000, worth $14,000 with a basis of $11,000. As a result, what will the tax consequences be to Tandem and Ned?
5. Question: (TCO E) What is a tax credit? Describe the two types of tax credits.
6. Question: (TCO F) Describe a type C reorganization.
7. Question: (TCO D) How is a shareholder’s basis in a corporation determined? What if boot is received? How is the assumption of liabilities considered?
8. Question: (TCO E) Why would the shareholders of a corporation liquidate the corporation?
9. Question: (TCO E) What is the alternative minimum tax? What adjustments are made to taxable income to determine AMTI? Do you think there should be an adjustment for the personal exemptions or standard deduction?
10. Question: (TCO B) Explain the exceptions to the statute of limitations. Explain why each is deemed an exception, in your mind.