Introduction: To operate a business, a taxpayer generally chooses between individual trading,
To choose: The true statement regarding corporate alternative minimum tax (AMT).
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Cengagenowv2 For Whittenburg/altus-buller/gill's Income Tax Fundamentals 2020, 1 Term Printed Access Card
- 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.arrow_forwardWhich 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 a. Corporate AMT has been repealed under the Tax Cuts and Jobs Act of 2017.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.arrow_forward1)Which of the following statements is true regarding the taxable income limitation on the qualified business income (QBI) deduction (assuming all of the taxpayer’s taxable income is ordinary income)? a)The limit is 20% of taxable income taxed at ordinary rates before deducting the QBI deduction. b)The limit is determined at the business entity level. c)None of the above statements is true. 2)In 2023, when the social security wage base limitation was $160,200, Jacee received a $100,000 business allocation from a partnership in which Jacee was a general partner. This is Jacee’s only source of income for the year. What is Jacee’s self-employment tax liability? Note: Round the final answer to the nearest whole dollar amount. a)$2,900 b)$3,824 c)$14,130 d)None of the choices is correct. 3)What kind of deduction is the deduction for qualified business income? a)A for AGI deduction b)A from AGI deduction that is not an itemized deduction c)None of the choices is correct.arrow_forward
- 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 However, the Tax Cuts and Jobs Act of 2017 repealed the corporate AMT for tax years beginning after 2017.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.arrow_forwardWhich of the following statements is true of corporations in 2021? Select one: a. Capital losses of a corporation may be deducted from ordinary income, subject to an annual limitation. b. A corporation may deduct organizational expenditures as they are incurred. c. If a corporation has a long-term capital loss that is carried back, it is treated as a short-term capital loss d. Income of all corporations is taxed in the same way that income of partnerships is taxed.arrow_forwardWhich of the following is NOT a new tax attribute found on the 2020 Form 1040? The Recovery Rebate Credit. The Virtual Currency Question. The Deduction for Qualified Business Income. The Charitable Contribution Deduction for taxpayers not itemizing.arrow_forward
- South Carolina Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $55,000 in 2021, $60,000 in 2022, and $65,000 in 2023. South Carolina's pretax financial income for 2020 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. required: (A) compute the taxable income and income tax expense current for 2020. compute also the deffered tax liability at dec 31,2020 (B) prepare journal entries to record income tax expense for 2020 pls put producer of how you compute the requirements. thanksyou :)arrow_forwardWhich of the following statements regarding political contributions made by a corporation is CORRECT? a. Political contributions are allowed as a deduction in the computation of taxable income, therefore they are deducted on Schedule 2. b. Corporations receive a tax credit equal to 15% of political contributions made in the year. O c. Political contributions are not allowed as a deduction in the computation of business income, therefore they are added back on Schedule 1. O d. The total deduction for political contributions is limited to 75% of the corporation's net income in the year.arrow_forwardDetermine the total fringe benefit tax of the following benefits for taxable year 2018: P40,800 grocery allowance for the personal consumption of one of A Corporation's rank and file employees; P32,500 expenses incurred by an executive of A Corporation in connection with attending business meeting; P36,000 expenses paid by an executive of A Corporation duly receipted in the name of A Corporation; P39,000 grocery allowance for the personal consumption of the manager of A Corporation P21,000 P17,500 P38,500 0arrow_forward
- Pina Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $52,500 in 2021. $57,500 in 2022, and $62,200 in 2023. Pina's pretax financial income for 2020 is $278,800, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. (a) Your answer is correct. Compute taxable income and income taxes payable for 2020. Taxable income Income taxes payable. $ 106600 31980arrow_forwardSouth Carolina Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $55,000 in 2021, $60,000 in 2022, and $65,000 in 2023. South Carolina's pretax financial income for 2020 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. Instructions a. Compute taxable income and income taxes payable for 2020. b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. c. Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.”arrow_forwardGreen Corporation is required to change its method of accounting for federal income tax purposes. The change will require an adjustment to income to be made over three tax periods. Joe, the sole shareholder of Green, wants to better understand the implications of this adjustment for E&P purposes, because he anticipates a distribution from Green in the current year. Explain to Joe the impact of the adjustment on E&P.arrow_forward