Which of the following taxpayers can use the cash method of accounting? a. Partnerships which have a C corporation as a partner b. Tax shelters c. C corporations with annual average gross receipts of $27 million for the three prior tax years d. C corporations with annual average gross receipts of $24 million for the three prior tax years

Which of the following taxpayers can use the cash method of accounting? a. Partnerships which have a C corporation as a partner b. Tax shelters c. C corporations with annual average gross receipts of $27 million for the three prior tax years d. C corporations with annual average gross receipts of $24 million for the three prior tax years

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter6: Accounting Periods And Other Taxes

Section: Chapter Questions

Problem 5MCQ: Which of the following entities is required to report on the accrual basis? An accounting firm...

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LO.3, 4, 5 Contrast the income taxation of individuals and C corporations as to: a. Alternative minimum tax. b. Dividend income. c. Qualified business income deduction of 20 percent. d. Use of the cash method of accounting. e. Accounting period used for tax purposes. f. Applicable tax rates. g. Due date of the tax return.
[The following information applies to the questions displayed below.] The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Tax Basis FMV Cash $ 46,200 $ 46,200 Accounts receivable 15,400 30,800 Inventory 82,500 122,100 Totals $ 144,100 $ 199,100 On December 31, Taurin distributes $15,400 of cash, $10,267 (FMV) of accounts receivable, and $40,700 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma’s basis in her partnership interest immediately prior to the distribution is $40,883. c1. If Emma’s basis before the distribution was $56,258 rather than $40,883, what is Emma’s recognized gain or loss? c2. What is her basis in the distributed assets?
The difference between partnership and corporation can be best described in which of the following statements? a. In a corporation, income is taxed at the corporate level, whereas, in a partnership, income is taxed twice. b. In a partnership, income is taxed once at the individual level; whereas, in a corporation, income is taxed twice c. Income from both forms of organizations is double-taxed. d. In a partnership, income is exempted from tax up to $10 million; whereas, in a corporation, income is taxed twice
Ebanks, Brown, and Thomas are partners. They carry on a business jointly as EBT surveyors and share profits and losses in the ratio 25:45: 30. The trading account profit as at 31 December 2021 was $6,500,000 after charging a nominal tax of $750,000. Notes: The partners receive interest on their capital accounts at 9.5 % on the balance of their partner capital at the end of the budget year. The interest on the capital account was not included in the income statement. Include in the income statement is $80,000 salary per month for each partner. The partnership paid motor vehicle expenses for vehicles owned by the partners as follows: Ebanks -$ 50,000 Brown - $80,000 Thomas - $130,000 The partners did not use the vehicles for the partnership business. Profit on disposal was $180,000. Depreciation on plant and machinery for the year was $900,000. In recognition of the new IFRS 9 standard, a provision for bad…
Which of the following statements regarding federal income tax is true? A. An entity may elect to change its classification for federal income tax purposes every four years. B. An insurance company is automatically classified as a partnership for federal income tax purposes. C. A limited liability company may have the fiscal year as its taxable Year or may follow partnership rules in selecting it's tax year end. D. Partnerships and S corporations can adopt adopt a year end that produces income deferral for up to 6 months.
Dennis and Company, a business partnership, in their 1st year of operation had the following data of income and expenses for the taxable year 2020: (in pesos)Gross Income 750,000Expenses 200,000 Dividend from a domestic corporation 75,000Interest on Bank deposit (gross of tax) 10,000Partners Dennis and Ariel share profits and losses in the ration of 55% and 45% respectively.How much is the income tax due and payable of the partnership?
Ebanks, Brown, and Thomas are partners. They carry on a business jointly as EBT surveyors and share profits and losses in the ratio 25:45: 30. The trading account profit as at 31 December 2021 was $6,500,000 after charging a nominal tax of $750,000. Notes:1. The partners receive interest on their capital accounts at 9.5% on the balance of their partner capital at the end of the budget year. The interest on the capital account was not included in the income statement. 2. Include in the income statement is $80,000 salary per month for each partner. 3. The partnership paid motor vehicle expenses for vehicles owned by the partners as follows:- Ebanks -$ 50,000- Brown - $80,000- Thomas - $130,000 The partners did not use the vehicles for the partnership business. 4. Profit on disposal was $180,000. 5. Depreciation on plant and machinery for the year was $900,000. 6. In recognition of the new IFRS 9 standard, a provision for bad debt of $75,000 was made. This represents a % of the business…