Reference no: EM133335537

Assignment:

Question 1. Tayla Corporation generated $400,000 of taxable income in 2019. What is Tayla's corporate tax liability?

a. $71,400

b. $84,000

c. $115,600

d. $0

e. None of the above

Question 2. Which of the following statements is false regarding business capital losses?

a. Corporations can deduct $3,000 of the net capital loss each year until the loss is exhausted.

b. Corporations can carry capital losses back 3 years and forward 5 years to offset capital gains in those years.

c. Corporations cannot deduct capital losses from ordinary income.

d. A long-term capital loss carried over to another year is treated as a short-term capital loss.

Question 3. Harrison Corporation generated capital gains/(losses) of $30,000, $2,000, ($40,000) in 2017, 2018, and 2019, respectively. Harrison began operations in 2017. What is Harrison's capital loss carryover to 2020?

a. $0

b. $8,000

c. $10,000

d. $38,000

e. None of the above

Question 4. The purpose of Schedule M-1 on the corporate tax return is:

a. Reconcile countable (book) income with taxable income.

b. Summarize the calculation of the deduction of dividends received.

c. List the officers of the corporation and their compensation.

d. Calculate the net operating loss deduction.

Question 5. Mansfield Incorporated, a calendar year corporation, expects to have an annual tax liability of $100,000. Which best describes the tax payments Mansfield must make to avoid a penalty?

a. Make payments at the end of June and December of $40,000 each and $20,000 when filing the return on the original due date.

b. Make no payments during the year, but pay the balance in full on the extended due date.

c. Make no payments during the year, but pay the balance in full on the original due date.

d. Make quarterly payments totaling $100,000, all during the current year.

e. None of these will avoid the penalty.