Taxation

1. Question : Which of the following items are eligible for immediate expensing and 180-month amortisation?
(1.) Fee to CPA to handle Subchapter S election
(2.) Refreshments served at organisational meetings
(3.) Underwriting commission
(4.) Legal fees in connection with incorporation
(5.) Recording fees upon transfer of assets to corporation


student Answer: (2), (4), and (5)
(1), (2), and (5)
(1), (2), (3), (4), and (5)
(1), (2), and (4)


Points Received: 4 of 4
Comments:



2. Question : Evan Erman transferred archive to a corporation in a Code Sec. 351 transaction. His base in the inventory was $10,000 and its value was $8,000.



If he received $2,000 in cash and 100 shares of buy in, the resulting bases are:


Student Answer: Evans banal: $8,000; Corporations inventory: $10,000
Evans stock: $10,000; Corporations inventory: $10,000
Evans stock: $10,000; Corporations inventory: $8,000
Evans stock: $8,000; Corporations inventory: $12,000


Points Received: 4 of 4
Comments:



3. Question : champion year Potter, Inc. had gross income from sales of $210,000, business expenses of $230,000, and dividend income from U.S. corporations of $150,000. Potters 80 percentage dividends-received deduction was:


Student Answer: $104,000
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