Question 1 Chris owns 70 percent of ABC Corporation. ABC Corporation had acquired land known as Parcel A in 1984 for $68,000 and held Parcel A for investment purposes. During the current taxable year, ABC Corporation sold Parcel A to Chris for $65,000 which amount was equal to the fair market value of Parcel A. Shortly after receiving Parcel A, Chris sold Parcel A to his friend from college for $73,000. How much gain or loss is realized and recognized by the respective parties as a result of each of the sales? A. ABC Corporation realized a loss of $3,000 and recognized a loss of $3,000 on the distribution; Chris realized a gain of $8,000 and recognized a gain of 8,000 on the sale. B. ABC Corporation realized a loss of $3,000 and recognized a loss of 3,000 on the distribution; Chris realized a gain of $5,000 and recognized a gain of $5,000. C. ABC Corporation realized a loss of $3,000 and recognized a loss of 0; Chris realized a gain of $8,000 and recognized a gain of $5,000. D. ABC Corporation realized a loss of $3,000 and recognized a loss of 0; Chris realized a gain of $5,000 and recognized a gain of$5,000. Question 2 For the current taxable year, HIJ Inc. had gross receipts from operations of $230,000, operating and other expenses of $310,000, and $120,000 of dividends that it received from a 45 percent-owned domestic corporation. For the current taxable year, HIJ Inc. has taxable income or a net operating loss of what amount? A. $8,000 taxable income. B. $40,000 taxable income. C. $56,000 net operating loss. D. $80,000 net operating loss. Question 3 NOP Inc. had the following income and expenses during the current taxable year. Its income from operations was $250,000, its expenses from operations were $120,000, its dividends received (from a 30 percent-owned corporation)) were $80,000, and it made cash charitable contributions of $30,000 How much is NOP Inc.s charitable contribution deduction for the current taxable year? A. $14,600. B. $21,000. C. $26,000. D. $30,000. Question 4 For the current taxable year, RST Inc.s gross income from operations was $1,000,000 and its expenses from operations were $1,500,000. RST Inc. also received a $600,000 dividend from a 10 percent-owned corporation. How much is RST Inc.s dividends-received deduction? A. 0. B. $70,000. C. $320,000. D. $420,000. Question 5 Books and Toys Corporation, a calendar year corporation, had a net operating loss of $50,000 for 2011. Books and Toys Corporation made a proper election to forego the carryback period. For 2012, Books and Toys Corporation correctly deducted $40,000 of the 2011 loss. Books and Toys Corporation will lose the remaining $10,000 of the loss if the loss cannot be deducted by the end of which tax year? A. 2018. B. 2021. C. 2026. D. 2031. Question 6 LMN Inc. liquidated. As part of the liquidation, one shareholder, Larry, who owned 30 percent of the stock of LMN Inc., received as a distribution in exchange for all of his stock in the corporation, inventory worth $90,000 that had a basis to the corporation of $70,000. How much gain was recognized by LMN Inc. as a result of this liquidating distribution and what was the character of the gain? A. $0 gain. B. $20,000 capital gain. C. $20,000 ordinary income. D. $20,000 Section 1231 gain. Question 7 Ben and John formed BCD Inc., a corporation, in 2011. Ben received 80% of the voting common stock, the only class of stock and John received the remaining 20% of the stock. In 2012, Ben transferred additional property to BCD Inc. The property had an adjusted basis to Ben of $40,000 and a fair market value of $50,000 on the date of the transfer. On the same day, and in exchange for the property he transferred to BCD Inc., Ben received cash of $15,000 and additional stock worth $35,000. How much gain was recognized by Ben as a result of this transaction? A. 0. B. $10,000. C. $15,000. D. $25,000. Question 8 Sue transferred a building to her newly formed corporation, RSTU Inc. The building…
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