Question : 61. For the year ended June 30, 2014, the Rosaceae Corporation, : 1313626

61. For the year ended June 30, 2014, the Rosaceae Corporation, a regular C corporation, has a long-term capital loss of $25,000. 

a.

?Assuming that in addition to the capital loss, the corporation has taxable income, before capital gains and losses, of $25,000 for 2014, calculate the corporation’s tax liability before any credits.

b.

?

?Assuming that in addition to the long-term capital loss of $25,000 the corporation has taxable income, before capital gains and losses, of $90,000 and a short-term capital gain of $10,000 for 2014, calculate the corporation’s tax liability before any credits.

ANSWER:  a.$3,750 = 15% × $25,000

b.$18,850, $13,750 + [($90,000 – $75,000) x 34%]

POINTS:  1

QUESTION TYPE:  Subjective Short Answer

HAS VARIABLES:  False

LEARNING OBJECTIVES:  ITF.WABG.15.LO:11-01 – LO:11-01ITF.WABG.15.LO:11-02 – LO:11-02

NOTES:  Additional tables, rates or other schedules may be required to assist the student in completing this test question.

62. During 2014, the Squamata Corporation, a regular C corporation, has $30,000 in ordinary income, a long-term capital loss of $20,000, and a short-term capital gain of $10,000. 

a.Calculate the Squamata Corporation’s tax liability for 2014.

b.

?Explain the nature and amount of any carrybacks or carryforwards that the corporation is entitled to use.

ANSWER:  a.$4,500 = 15% × $30,000.

b.

?$10,000 long-term capital loss. It becomes a short-term capital loss and can be carried back 3 years and forward 5 years to offset capital gains in those years.

POINTS:  1

QUESTION TYPE:  Subjective Short Answer

HAS VARIABLES:  False

LEARNING OBJECTIVES:  ITF.WABG.15.LO:11-01 – LO:11-01ITF.WABG.15.LO:11-02 – LO:11-02

NOTES:  Additional tables, rates or other schedules may be required to assist the student in completing this test question.

63. Calculate the corporate tax liability in each of the following circumstances: 

a.X Corporation has taxable income of $250,000 for its 2014 calendar tax year.

b.Y Corporation has $1,600,000 in taxable income for 2014.

c.

?Z Corporation has taxable income of $100,000, before capital gains and losses, a short-term capital loss of $30,000, and a long-term capital gain of $10,000 in 2014.

ANSWER:  a.$80,750 = $22,250 + 39% × ($250,000 – $100,000)

b.$544,000 = $113,900 + 34% × ($1,600,000 – $335,000)

c.$22,250 on taxable income of $100,000

POINTS:  1

QUESTION TYPE:  Subjective Short Answer

HAS VARIABLES:  False

LEARNING OBJECTIVES:  ITF.WABG.15.LO:11-01 – LO:11-01ITF.WABG.15.LO:11-02 – LO:11-02

NOTES:  Additional tables, rates or other schedules may be required to assist the student in completing this test question.

64. During 2014, the Melaleuca Corporation received dividends from 50-percent-owned domestic corporations in the amount of $100,000. 

a.

?

?Assuming that in addition to the dividend income the corporation has gross income from operations of $250,000 and deductible operating expenses of $210,000, calculate the amount of the corporation’s dividends received deduction for 2014.

b.

?

?If, instead of $250,000 in gross income from operations, the corporation has $200,000 in gross income from operations and the same amount of dividends and expenses, calculate the amount of the corporation’s dividends received deduction for 2014.

ANSWER:  a.$80,000 = $100,000 × 80%

b.$72,000 = Lesser of: 80% × ($200,000 – $210,000 + $100,000) or $100,000 x 80%

POINTS:  1

QUESTION TYPE:  Subjective Short Answer

HAS VARIABLES:  False

LEARNING OBJECTIVES:  ITF.WABG.15.LO:11-03 – LO:11-03

NOTES:  Additional tables, rates or other schedules may be required to assist the student in completing this test question.