Federal Taxation Week 1 Quiz

845 WordsMar 11, 20144 Pages
. (TCO 2) Barry owns a 30% interest in a partnership that earned $300,000 this year. He also owns 30% of the stock in a C corporation that earned $300,000 during the year. The partnership did not make any distributions, and the corporation did not pay any dividends. How much income must Barry report from these businesses? (Points : 2) | $0 income from the partnership and $0 income from the corporation $0 income from the partnership and $90,000 income from the corporation $90,000 income from the partnership and $0 income from the corporation $90,000 income from the partnership and $90,000 income from the corporation None of the above | Question 2. 2. (TCO 2) Lilac Corporation, a closely held…show more content…
In return, Helen receives 100 shares in Red Corporation. With respect to the transfers, (Points : 2) | Kirby will recognize gain. Helen will not recognize gain. Red Corporation will have a basis of $280,000 in the property it acquired from Helen. Red will have a business deduction of $20,000. None of the above | Question 8. 8. (TCO 11) Which statement, if any, does not reflect the rules governing the negligence accuracy-related penalty? (Points : 2) | The penalty rate is 20%. The penalty is imposed only on the part of the deficiency attributable to negligence. The penalty applies to all federal taxes, except when fraud is involved. The penalty is waived if the taxpayer uses Form 8275 to disclose a return position that is reasonable though contrary to the IRS position. None of the above | Question 9. 9. (TCO 11) The rules of Circular 230 need not be followed by (Points : 2) | an attorney. a CPA. a Walmart cashier who e-files 15 tax returns for her paying clients per filing season. an enrolled agent. All of the above are subject to the Circular 230 rules. | Question 10. 10. (TCO 11) The privilege of confidentiality applies to a CPA tax preparer concerning the client’s information relative to (Points : 2) | financial accounting tax accrual workpapers. a tax research memo used to determine an amount

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