Civil Law Questions

Candles, Inc. distributes some defective candles to its shareholders. The market value of the candles was $20,000 (adjusted basis = $60,000). What are the tax consequences of the distribution to Candles?

A corporation will be required to file Schedule UTP if assets exceed

The amount of tax benefit NOT recognized on an uncertain tax position is treated as a(n):

Watermelon Partnership distributes unrealized receivables to William in a liquidating distribution. William does NOT collect on these receivables for over five years. What is the character of the income to William?

Mia has an outside basis of $50,000 in the Brimstone Partnership, including her share of liabilities of $25,000. In a liquidating distribution, she receives cash of $40,000. What is Mia's recognized gain or loss on the liquidation?

Gopher Inc. has current E&P of $40,000 and accumulated E&P of negative $100,000. Gopher makes a $60,000 distribution. What is the character of the distribution?

Which of the following provides an opportunity for a corporation to avoid double taxation on payments to its shareholders?

A measure of a corporation's economic profits is known as_________ and__________ .

General Partnership distributes investments that it has held for two years to Major, an individual partner in a liquidating distribution. What is the character of the investments to Major?

Industry, Inc. recorded $100,000 of depreciation on its books in Year 1 (its first year of business) and $150,000 of tax depreciation in Year 1. What is the cumulative difference in the book and tax basis of the assets?

When determining whether a tax position will be sustained upon examination, a company ______ consider the likelihood that the taxing jurisdiction will examine the position.

Cougar, Inc. has correctly computed the following information for tax purposes: Taxable income $200,000 Federal income taxes $60,000 Cougar's income includes: Dividends received deduction $5,000 Meals $4,000 (8,000 x 50% limit) $3,000 business fine Cougar did not include $10,000 of municipal bond interest and deferred gain from an installment sale of $20,000. What is Cougar's current E&P for the year?

The application of enacted tax law against the taxable income for the year is the:

Deferred tax assets and liabilities are calculated using the ______ tax rate that is expected to apply when the temporary difference is received or settled.

The current income tax expense is calculated using the______ tax law.

When a corporation pays a distribution that is characterized as a dividend, the corporation _______ the dividend from taxable income.

Spiro Partnership holds cash, inventory and unrealized receivables. Josh, a one-third partner, receives a cash only liquidating distribution representing one-third the value of the partnership. This distribution is a:

Joshuantic, Inc. has cumulative unfavorable temporary differences of $80,000 and, thus, records a $16,800 deferred tax asset. However, Joshuantic believes that it may NOT be able to realize that asset. As a result, Joshuantic will

Lower Texas, Inc. (LTI) took a tax position to treat $100,000 of income as tax-exempt. However, LTI is not certain that the treatment will be sustained. After analyzing the position, LTI determines that the there is a 40% chance that $80,000 will be treated as tax-exempt and a 75% chance that $40,000 will be treated as tax-exempt. Assuming a 35% tax rate, and if the more likely than not threshold is met, what is the uncertain tax liability associated with this position?

Which of the following methods is an acceptable way for partners to allocate income or loss when their interests change during the year? (Check all that apply.)