Questions from Federal Taxation

Q: Alice and Barry own all the shares of Alpha Corporation. For

Alice and Barry own all the shares of Alpha Corporation. For the current year, the corporation reports the following income and expenses: During the eighth month of the current year, Alpha Corporatio...

Q: Lucia, a single taxpayer, operates a florist business. She

Lucia, a single taxpayer, operates a florist business. She is considering either continuing the business as a sole proprietorship or reorganizing it as either a C corporation or an S corporation. Her...

Q: In each of the following scenarios, indicate why Adobe Corporation’s accumulation

In each of the following scenarios, indicate why Adobe Corporation’s accumulation of earnings might be unreasonable relative to its business needs. Provide one or more arguments the corporation might...

Q: Lion Corporation is concerned about a potential accumulated earnings tax liability.

Lion Corporation is concerned about a potential accumulated earnings tax liability. It accumulates E&P for working capital necessary to conduct its manufacturing business. The following data appea...

Q: In each of the following scenarios, calculate the accumulated earnings credit

In each of the following scenarios, calculate the accumulated earnings credit. Assume the corporation uses a calendar year as its tax year. Also assume that it realizes no current year capital gains....

Q: Century Cleaning, Inc. provides cleaning services in Atlanta, Georgia

Century Cleaning, Inc. provides cleaning services in Atlanta, Georgia. It is not a member of a controlled or an affiliated group. Century reports the following results for the current year: Taxable i...

Q: Howard Corporation conducts a manufacturing business and has a compelling need to

Howard Corporation conducts a manufacturing business and has a compelling need to accumulate earnings. Its January 1, E&P balance is $600,000. It reports the following operating results for the curren...

Q: Broadway Corporation is a C corporation not exempt from the AMT.

Broadway Corporation is a C corporation not exempt from the AMT. During the current year, Broadway contributed significant amounts of cash to various charitable organizations. Should Broadway make any...

Q: Camp Corporation is owned by Hal and Ruthie, who have owned

Camp Corporation is owned by Hal and Ruthie, who have owned their stock since the corporation was formed fourteen years ago. The corporation uses the calendar year as its tax year and the accrual meth...

Q: William Queen owns all the stock in Able and Baker Corporations.

William Queen owns all the stock in Able and Baker Corporations. Able, a successful enterprise, has generated excess working capital of $3 million. Baker is still in its developmental stages and has h...