Deck 15 Flashcards Preview

Regulation > Deck 15 > Flashcards

Flashcards in Deck 15 Deck (20):
1

Organizations that are not required to file form 990:

$50,000 or less gross receipts and CHRIST (churches, high schools - religious, religious orders, internal support auxiliaries, societies - missionary related, tax exempt)

2

Transfer pricing issues exist when a U.S.-based taxpayer shares costs with an affiliate that either:

(i) is not subject to the U.S. income tax or (ii) does not file a consolidated income tax return with the U.S.-based taxpayer.

3

Advance Pricing Agreement (APA) program:

Binding contract between the IRS and the taxpayer, IRS does not seek a transfer pricing adjustment for a covered transaction if the taxpayer files its return for a covered year

4

Transfer pricing issues exist when a U.S.-based taxpayer shares costs with an affiliate that either:

(i) is not subject to the U.S. income tax or (ii) does not file a consolidated income tax return with the U.S.-based taxpayer

5

Factors that affect income taxes and cash flows:

Asset abandonment, asset sale, and asset trade-in

6

Asset Trade-in (gain or loss recognized?)

No gain or loss recognized for tax purposes

7

Realized gain for corporation =

FMV of property - basis of property

8

Recognized gain =

the amount of boot received; if no boot then no gain

9

Shareholder's tax basis =

NBV of property + cash contributed - liability assumed

10

Failure-to-pay penalty:

The penalty is half a percent for each month or fraction of a month up to a maximum of 25%

11

Is tax exempt interest subtracted or added back to book income?

Subtracted

12

Is excess depreciation subtracted or added back to book income?

Subtracted

13

What amount of a distribution it tax-free?

Distribution is tax-free to the extent of the Accumulated Adjustments account balance

14

The statute of limitations for collection of an assessment generally extends to:

10 years after the assessment date

15

Passive activity losses are fully deductible only in the year of:

Disposal

16

Foreign income taxes paid by a domestic corporation may be claimed either as a:

Deduction or a credit, at the option of the corporation

17

Basis for like-kind exchanges =

basis of old property - any boot received

18

Wash sale

Occurs when a taxpayer sells stock at a loss and invests in substantially identical stock within 30 days before or after the sale. Losses are not deductible for wash sales

19

Capital assets

All property except: property normally included in inventory, depreciable property and real estate used in business, Accounts receivable and notes receivable from sales or services, copyrights, and treasury stock

20

An investment in a capital asset results in what?

The income being capital