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Exam 3 Quiz Questions Tax Accounting
Questions and Correct Answers/ Latest
Update / Already Graded
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
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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
Which of the following statements regarding the tax burden imposed
on business entities is true?
The tax burden imposed on corporate earnings is always lower if the
corporation makes an S election.
Business owners desiring current cash flow can maximize annual after-
tax cash flow by operating as a regular corporation.
Current tax cost associated with shareholder cash flow received as
dividends may be lower than cash flow received as payments of salary,
interest, or rental income.
All of these statements are true.
All rights reserved © 2025/ 2026 |
Exam 3 Quiz Questions Tax Accounting
Questions and Correct Answers/ Latest
Update / Already Graded
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
All rights reserved © 2025/ 2026 |
, Page |2
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
Which of the following statements regarding the tax burden imposed
on business entities is true?
The tax burden imposed on corporate earnings is always lower if the
corporation makes an S election.
Business owners desiring current cash flow can maximize annual after-
tax cash flow by operating as a regular corporation.
Current tax cost associated with shareholder cash flow received as
dividends may be lower than cash flow received as payments of salary,
interest, or rental income.
All of these statements are true.
All rights reserved © 2025/ 2026 |
