Question :
1. Corporations pay a flat 30 percent federal income tax.
a. True
b. False
ANSWER: False
: 1313620
1. Corporations pay a flat 30 percent federal income tax.
a. True
b. False
ANSWER: False
RATIONALE: Corporate marginal rates range from 15 percent to 39 percent.
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.15.LO:11-01 – LO:11-01
2. The corporate tax rates favor large corporations.
a. True
b. False
ANSWER: False
RATIONALE: The corporate tax rates range from 15 percent to 39 percent. For large corporations with taxable income over $18,333,333, the corporate tax rate is a flat 35 percent.
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.15.LO:11-01 – LO:11-01
3. Corporations are granted favorable tax treatment for short-term capital losses.
a. True
b. False
ANSWER: False
RATIONALE: Corporations are not allowed to deduct net capital losses against ordinary income.
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.15.LO:11-02 – LO:11-02
4. A corporation may carry forward capital losses for an indefinite period.
a. True
b. False
ANSWER: False
RATIONALE: A corporation may carry forward capital losses for 5 years.
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.15.LO:11-02 – LO:11-02
5. Capital losses of a corporation must be used to offset capital gains and net capital losses may not be deducted from the ordinary income of a corporation.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.15.LO:11-02 – LO:11-02
6. If a corporation is unable to deduct a capital loss against capital gains for a particular tax year, it loses the tax benefit since the loss may not be carried to other tax years.
a. True
b. False
ANSWER: False
RATIONALE: If capital losses cannot be used in the year they occur, they may be carried back 3 years and carried forward 5 years to offset capital gains in those years.
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.15.LO:11-02 – LO:11-02
7. Corporations may deduct without limitation any amount of charitable contributions providing the amounts are paid to qualified organizations.
a. True
b. False
ANSWER: False
RATIONALE: A corporation’s current year charitable contribution deduction is limited to 10 percent of taxable income, computed before the deduction for charitable contributions, net operating loss carrybacks, capital loss carrybacks, and the dividends received deduction.
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.15.LO:11-03 – LO:11-03
8. Corporations are not allowed to amortize the costs of organizing the corporation.
a. True
b. False
ANSWER: False
RATIONALE: Corporations may amortize qualifying organizational costs over 180 months.
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.15.LO:11-03 – LO:11-03
9. A corporation may elect to take a credit for dividends paid in lieu of claiming a dividends received deduction.
a. True
b. False
ANSWER: False
RATIONALE: Corporations are entitled to a dividends received deduction based on their percentage of ownership in the corporation paying the dividend. There is no credit for dividends received.
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.15.LO:11-03 – LO:11-03
10. A corporation owning 80 percent or more of the stock of another corporation has a dividends received deduction of 100 percent.
a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.15.LO:11-03 – LO:11-03
