CORPORATE INCOME TAX EXAM GUIDE QUESTIONS WITH COMPLETE SOLUTIONS

CORPORATE INCOME TAX EXAM GUIDE
QUESTIONS WITH COMPLETE
SOLUTIONS
Statutory tax rate - Answer-amount plugged into tax bracket

Effective tax rate - Answer-what you paid as a percent of income; after filed taxes

Differences between c corp and individual - Answer-fewer exclusions and no AGI

Does a partnership pay federal income tax? - answer-no

Does a llc pay federal income tax? - answer-no

Does a sole proprietorship pay federal income tax? - answer-no

Does a c corp pay federal income tax? - answer-yes

What do qualified dividend income rates depend on? - answer-tax bracket

Which entity's income does not retain its character from entity level to
shareholder/member level? - answer-c corp

How does income not retain its character in a c corp? - answer-at entity level the
income is a capital gain and at shareholder level it is ordinary income

Can a llc retain income at entity level and avoid/defer taxability? - answer-no

Can a sole proprietorship or an s corp separate the owner from the income? - answer-
no

Can a c corp separate the owner from the income? - answer-yes

Max qualified dividend income rate - answer-20%

Minimum qualified dividend income rate - answer-0%

for which entity(ies) is continuity of life a feature? - Answer-LLC and corporations

Is section 351 elective or mandatory? - answer-mandatory

What doesn't count as property? - answer-services