Reference no: EM132839165
Questions -
Q1. Which of the following statements is incorrect regarding the tax treatment of capital gains and losses for corporate taxpayers:
a. Net long-term capital gains are not taxed at preferential income tax rates.
b. Net capital losses can only be taken to the extent of capital gains.
c. Like for individuals, $3,000 of net capital losses can be taken in excess of capital gains each year.
d. Net capital losses can be carried back two years and forward five years.
e. None of the above.
Q2. In April, A and B formed X Corp. A contributed $50,000 cash, and B contributed land worth $70,000 (with an adjusted basis of $40,000). B also received $20,000 cash from the corporation. A and B each receives 50% of the corporation's stock. What is the tax basis of the land to X Corp.?
a. $40,000
b. $50,000
c. $60,000
d. $70,000
e. None of the above
Q3. Which of the following is a capital asset?
a. Inventory held primarily for sale to customers.
b. Accounts receivable.
c. A computer system used by the taxpayer in a personal accounting business.
d. Land held as an investment.
e. None of the above.