TAX ACCOUNTING EXAM 3 2025
QUESTIONS AND ANSWERS
What is a tax advantage for gift of capital partnership interest?
It must be figured by increasing the partnership income by reasonable compensation for
services the donor renders to the partnership.
Tax advantage of shifting income to a family member that has a lower marginal tax rate than
the original partners.
Family member will have a voice in the day to day operations and be able to hold the cash upon
liquidation.
The donee's distributive share of partnership income attributable to donated capital must be
proportionately greater than the donor's distributive share attributable to the donor's capital. -
ANS Tax advantage of shifting income to a family member that has a lower marginal tax rate
than the original partners.
A business generates profit of $100,000. The owner has a 37% marginal tax rate. What amount
of corporate and individual income tax will be paid on this profit if the business is a regular
corporation and no income is distributed? Corporate tax, $0; individual tax, $37,000
Corporate tax, $21,000; individual tax, $37,000
Corporate tax, $21,000; individual tax, $0
Corporate tax, $21,000; individual tax, $15,800 - ANS Corporate tax, $21,000; individual tax,
$0
1 Copyright ©BRIGHSTARS ALL RIGHTS RESERVED 2025
QUESTIONS AND ANSWERS
What is a tax advantage for gift of capital partnership interest?
It must be figured by increasing the partnership income by reasonable compensation for
services the donor renders to the partnership.
Tax advantage of shifting income to a family member that has a lower marginal tax rate than
the original partners.
Family member will have a voice in the day to day operations and be able to hold the cash upon
liquidation.
The donee's distributive share of partnership income attributable to donated capital must be
proportionately greater than the donor's distributive share attributable to the donor's capital. -
ANS Tax advantage of shifting income to a family member that has a lower marginal tax rate
than the original partners.
A business generates profit of $100,000. The owner has a 37% marginal tax rate. What amount
of corporate and individual income tax will be paid on this profit if the business is a regular
corporation and no income is distributed? Corporate tax, $0; individual tax, $37,000
Corporate tax, $21,000; individual tax, $37,000
Corporate tax, $21,000; individual tax, $0
Corporate tax, $21,000; individual tax, $15,800 - ANS Corporate tax, $21,000; individual tax,
$0
1 Copyright ©BRIGHSTARS ALL RIGHTS RESERVED 2025
