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Which of the following statements is true?
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All corporations are subject to AMT. |
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Small corporations with average annual gross receipts of less than $10 million are not subject to AMT. |
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The Tax Cuts and Jobs Act of 2017 repealed the corporate alternative minimum tax (AMT) beginning in 2018. |
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The AMT rate is 25% of AMT income after exemption. |
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- Which of the following statements about the calculation of corporate alternative minimum tax (AMT) is true? a. Corporate AMT has been repealed under the Tax Cuts and Jobs Act of 2017. b. The AMT net operating loss can reduce AMTI to zero. c. The AMTI exemption for all corporations is $40,000. d. The minimum tax credit can be carried back two years.For many years preceding 2018, Minimis Corporation, a calendar year corporation, had incurred the alternative minimum tax (AMT) and as a result had a $2 million minimum tax carryover into 2018. However, the Tax Cuts and Jobs Act of 2017 repealed the corporate AMT for tax years beginning after 2017. Minimis expects its regular tax liability to be $100,000 per year for 2018, 2019, 2020, and 2021. Your supervisor has asked you to determine how Minimis treats the minimum tax credit carryover in these four years now that the corporate AMT has been repealed. Your supervisor has suggested that you start by looking at IRC Sec. 53.For its current tax year, Ilex Corporation has ordinary income of $250,000, a short-term capital loss of $20,000 and a long-term capital gain of $60,000. Calculate Ilex Corporation's tax liability for 2020.$ Prior to 2018, the U.S. corporate tax rate structure had eight tax brackets with progressive marginal tax rates ranging from 15 percent to 39 percent. Starting in 2018, corporations are subject to a flat income tax rate. Corporations are limited in the way that capital losses may be deducted. However, losses may be carried back and carried forward.
- In 2010, Garner Grocers had taxable income of -$2,000,000. The corporate tax rate is 25%. Assume that the company takes full advantage of the Tax Code’s carry-forward provision. In 2021, Garner has taxable income of $1,000,000. What is the amount of taxes the company paid in 2021? a. $20,000 b. $8,000 c. $0 d. $90,000 e. $586,500Buster Corporation reported $150,000 in revenues in its Year 1 financial statements, of which $50,000 will not be included in the tax return until Year 2. The enacted tax rate is 34% for Year 1 and 25% for Year 2. What amount should Roger report for deferred income tax liability in its balance sheet at December 31, Year 1?Which of the following is true concerning the American Taxpayer Relief Act of 2012? This tax law leads to the immediate elimination of the federal estate tax. This tax law leads to the immediate elimination of the federal gift tax. This tax law provides for a $5.45 million tax-free exemption, as a result of indexing, for estates created in 2016. This tax law leads to the immediate elimination of the generation-skipping tax.
- In September 2008, the IRS changed tax laws to allow banks to utilize the tax loss carryforwards of banks they acquire to shield up to 100% of their future income from taxes (prior law restricted the ability of acquirers to use these credits). Suppose Fargo Bank acquired Covia Bank and with it acquired $58 billion in tax loss carryforwards. If Fargo Bank was expected to generate taxable income of $8 billion per year in the future, and its tax rate was 30%, what was the present value of these acquired tax loss carryforwards given a cost of capital of 8%? How would the present value change under current law which restricts the amount of the deduction to 80% of pre-tax income? Question content area bottom Part 1 If Fargo Bank was expected to generate taxable income of $8 billion per year in the future, and its tax rate was 30%, what was the present value of these acquired tax loss carryforwards given a cost of capital of 8%? The present value of these acquired tax loss…This company began operations in 2014. The table below contains the company’s taxable income during each year of its operations. Notice that the company lost money in each of its first three years. The corporate tax rate has been 40% each year. Year Taxable Income 2014 -$700,000 2015 -$500,000 2016 -$200,000 2017 $800,000 2018 $1,000,000 Assume that the company has taken full advantage of the Tax Code’s carry-back, carry-forward provisions, and assume that the current provisions were applicable in 2014. How much did the company pay in taxes during 2018? $185,220 $194,481 $176,400 $160,000 $168,000Since corporations are taxed at a flat rate of 21%. I answed the question with that calculation. Is that correct? Compute the income tax liability for each of the following unrelated calendar year C corporations. Since corporations are taxed at a flat rate of 21% Darter Corporation has taxable income of $68,000. 68000*.21=$14,280 Owl Corporation has taxable income of $10,800,000. 10,800,000*.21=2,268,000 Toucan Corporation, a personal service corporation, has taxable income of $170,000. 170,000*.21=$35,700
- Assume that Farm Fresh Produce, Inc. is a chain of farmers’ market kiosks that is organized as a corporation and operates in the upper Midwestern states. During the current year, the business realized a “Pre-Tax Income” of $2,350,000. Using the 21% corporate tax rate specified in the “Tax Cuts and Jobs Act” of 2017, calculate the tax liability for Farm Fresh Produce, Inc. for the current year Using the 21% corporate tax rate specified in the “Tax Cuts and Jobs Act” of 2017, calculate the tax liability for Farm Fresh Produce, Inc. for the current year. Calculate the “After-Tax Earnings” for Farm Fresh Produce, Inc.In 2007, two domestic corporations operating in the same industry report the following effective tax rates: Rally and More, Inc., 35%, and Dontall and Less, Inc., 20%. You believe Dontall is doing a better job with their tax planning due to the lower effective tax rates and, therefore, decide to invest $100,000 in Dontall. After a couple of years, you find out from a public announcement that Dontall has been under investigation by the IRS for using some aggressive tax planning strategies. You contact the CEO of Dontall who tells you it is nothing to worry about and that the CPAs (Anderson and Company CPAs) have this all under control. One year later, the stock takes a nosedive on a Wednesday morning after the press prints an article stating that the IRS has adjusted the taxable income of Dontall upward after an auditor found that some of the reported tax benefits and expenses were falsely reported. Even before the penalties, the newly assessed tax rate of Dontall is now greater than…In 2020, Garner Grocers had taxable income of -$2,000,000. The corporate tax rate is 25%. Assume that the company takes full advantage of the Tax Code's carry-forward provision. In 2021, Garner has taxable income of $1,000,000. What is the amount of taxes the company paid in 2021?