Reference no: EM13618242

1. Which statement, if any, is false?

a. An S corporation is subject to the corporate AMT.

b. A high level of investment in assets (e.g., equipment or structures) is a reason a company may be subject to the AMT.

c. Many of the adjustments that apply to individuals also apply to corporations.

d. None of the Above

2. Which entity is subject to the ACE provisions?

a. S corporation

b. Real estate investment trust (REITs)

c. Regulated investment companies

d. Real Estate mortgage investment conduits.

e. None of the Above

3. Art, an unmarried individual, tranfers property (basis of $130,000 and fair market value of $120,000) to Condor Corporation in exchange for 1244 stock. The transfer qualifies as nontaxable exchange under 351. Five years later, Art sells the Condor stock for $50,000. With respect to the sale, Art has:

a. An ordinary loss of $80,000.

b. An ordinary loss of $70,000 and a capital loss of $10,000

c. A capital loss of $80,000.

d. A capital loss of $30,000 and an ordinary loss of $50,000

e. None of the above

4. A retail company has the following items related to AMT.

Alternative minimum taxable base                $98,502,900

Regular tax                                                    11,202,098

Foreign AMT tax credit                                    4,400,000

Calculate the company's AMT, if any.

5. Perry organized Cardinal Corporation 10 years ago by contributing property worth $2 million, basis of $450,000, for 2,500 shares of stock in Cardinal, represeting 100% of the stock in the corporation. Perry later gave each of his children, Brittany and Julie, 750 shares of stock in Cardinal Corporation. In the current year, Perry transfers property worht $600,000, basis of $150,000, to Cardinal for 1,000 shares in the corporation. What gain, if any, will Perry recognize on the transfer?