ACC 565 Midterm Exam Guide\tQuestion 1\tIdentify which of the following statements is false. \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\tQuestion 2\tWhich of the following transactions does nothave the potential of creating a constructive dividend?\u00a0\u00a0 \ufffd \ufffd \ufffd\u00a0\u00a0\tQuestion 3\tThe citation “Reg. Sec. 1.199-2” refers to \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\tQuestion 4\tBruce receives 20 stock rights in a nontaxable distribution. The stock rights have an FMV of $5,000. The common stock with respect to which the rights are issued has a basis of $4,000 and an FMV of $120,000. Bruce allows the stock rights to lapse. He can deduct a loss of\u00a0\u00a0\tQuestion 5\tIdentify which of the following statements is true. \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\tQuestion 6\tA corporation cannot reasonably accumulate earnings to \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0\tQuestion 7\tSmall case procedures of the U.S. Tax Court requires that the amount in dispute not exceed\u00a0\u00a0\u00a0\tQuestion 8\tFor purposes of determining current E&P, which of the following items cannot be deducted in the year incurred? \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\tQuestion 9\tWhat are the consequences of a stock redemption to the distributing corporation? \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0\tQuestion 10\tUnder a plan of complete liquidation, Coast Corporation distributes land with a $300,000 adjusted basis and a $400,000 FMV to William, a 25% shareholder. William has a $200,000 basis in his Coast stock. The land is inventory in the hands of Coast Corporation. Coast Corporation must recognize \ufffd \ufffd \ufffd \ufffd\tQuestion 11\tThe phrase “Entered under Rule 155” indicates that \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\tQuestion 12\tYou need to locate a recent tax case that was tried in a Federal district court. The decision is an “unreported” decision. This means the decision was \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\tQuestion 13\tWhen using the Bardahl formula, an increase in accounts payable (while holding purchases and operating expenses constant) has which of the following effects on the working capital\tQuestion 14\tWhich of the following steps, related to a tax bill, occurs first? \ufffd \ufffd \ufffd \ufffd \ufffd\tQuestion 15\tDexer Corporation is owned 70% by Amy and 30% by Brad. Dexer Corporation owns Eagle Corporation stock with a $50,000 adjusted basis and a $30,000 FMV. The stock is not disqualified property. As part of a complete liquidation, the Eagle Corporation stock is distributed to Amy. Amy’s basis in her Dexer stock is $40,000. Dexer Corporation will recognize \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\tQuestion 16\tWhich of the following requirements must be met for a redemption to be treated as substantially disproportionate? \ufffd \ufffd \ufffd \ufffd \ufffd\tQuestion 17\tDuring the course of an audit, a CPA discovers an error in a prior return. According to the Statements on Standards for Tax Services, the CPA should \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\tQuestion 18\tWhich of the following is not a condition that permits a stock redemption to be treated as a sale? \ufffd\u00a0 \ufffd \ufffd \ufffd\u00a0\u00a0\tQuestion 19\tCarolyn transfers property with an adjusted basis of $50,000 and an FMV of $60,000 in exchange for Prime Corporation stock in a Sec. 351 transaction. Carolyn’s basis in the stock is \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\tQuestion 20\tTia owns 2,000 shares of Bass Corporation common stock with an $80,000 basis. Bass distributes a nontaxable preferred stock dividend. When the preferred stock is distributed, it has an FMV of $60,000 and the FMV of the 2,000 common stock shares is $180,000. The basis of the preferred stock is \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd \ufffd\u00a0\u00a0\tQuestion 21\tAmerican Corporation acquires the noncash assets of Utech Corporation in exchange for $700,000 of its voting stock plus $50,000 of cash. Utech Corporation assets are worth $750,000. Utech Corporation does not distribute the stock and cash but instead holds the stock as an investment. Utech will use the American cash along with the cash it retained to start a new business. The transaction can be classified as a \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\tQuestion 22\tDixie Corporation distributes $31,000 to its sole shareholder, Sally. At the time of the distribution, Dixie’s E&P is $25,000 and Sally’s basis in her Dixie stock is $10,000. Sally’s basis in her Dixie stock after the distribution is \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0\tQuestion 23\tTomika Corporation has current and accumulated earnings and profits of $0. Tomika distributes $10,000 to its sole shareholder, Alana. What are Tomika’s earnings and profits\tQuestion 24\tWhich of the following items are tax preference items for purposes of arriving at alternative minimum taxable income? \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\tQuestion 25\tJLA is a U.S. shoe manufacturer. Its domestic production income is $1,000,000 and U.S. W-2 wages are $600,000. Taxable income before the domestic production deduction is $500,000. What is the amount of the production activities deduction?<\/p>\n","protected":false},"excerpt":{"rendered":"
ACC 565 Midterm Exam Guide Question 1 Identify which of the following statements is false. \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0 Question 2 Which of the following transactions does nothave the potential of creating a constructive dividend?\u00a0\u00a0 \ufffd \ufffd \ufffd\u00a0\u00a0 Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-200505","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=200505"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200505\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=200505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=200505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=200505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}