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Flashcards in R-3 Deck (17):
1

What is C-Corp tax consequence?

There is no gain or loss to the corp for issuing stock in exchange for property.

2

What is the basis for property?

Greater of:
Adjusted basis or Debt assumed by corp

3

When are bonus accrual deductible?

If paid within 2.5 months after year-end.

4

What are business casualty loss?

Loss incurred during taxable year is 100% deductible.

5

What are organizational expenditures included?

Legal services, accounting services and fees paid to state.

6

What is amortization and depreciation of intangibles?

15 years straight line.

7

When is employee insurance not taxable?

When corp is the beneficiary.

8

What is nature of Capital losses?

offset by capital gains and 3 back and 5 forward.

9

What is nature of Net Operating loss (NOL)?

2 back and 20 forward.

No charitable deduction allowed
DRD is allowed before calculating NOL.

R-3 pg 20

10

What are basic valuation methods?

Cost method
Lower of cost or market
Rolling Average method
Retail method.

11

What is nature of credit carryover?

Carried back one year and carried forward 20 years.

12

Where does DRD does not apply?

Personal service corp
Personal holding company
(Perosnally taxed) S Corps

13

How is M-1 calculated?

R-3 pg 26

14

What is Adjusted current earnings?

ensure that corps do not report profit for financial statement purposes but pay little or no income taxes.

15

What is personal holding company?

50 percent owned by 5 or fewer individuals and having 60 percent of adjusted ordinary gross income

Net rent
Interest
Royalties
Dividends.

16

When does S- Corp status terminates?

majority shareholders consent to revocate
fails to meet eligibility requirements
More than 25 percent of receipts come from passive investment for 3 consecutive years and had C corp earnings and profits

New election cannot be made for 5 years.

17

What is to file for tax exempt organizations?

Form 990 and not required for religious orgs and tax exempt status given by Congress.