1. Most unincorporated businesses formed after 1996 can choose whether to be taxed as a
partnership or a corporation. The new regulations provide for a default rule if no election is made. If
an election is not made and the default rules apply, which of the following is true?
a. Any new domestic eligible entity having at least two or more members is classified as a
partnership.
b. Any new domestic eligible entity with a single member is disregarded as an entity separate from
its owner.
c. If all members of a new foreign entity have limited liability, the entity is classified as an
association.
d. All of the answers are correct
2.
All of the following businesses, formed after 1996, are automatically classified as corporations
EXCEPT
a. An insurance company.
b. A partnership that possesses at least three of the following characteristics: limited liability,
centralized management, free transferability of interest, and continuity of life.
c. Certain foreign businesses.
d. A business wholly owned by a state or local government.
3. ABC Corporation, a C corporation, is dissolved on June 9, Year 1. What is the due date, without
extensions, for the filing of the final corporate income tax return?
a. April 15, Year 2.
b. December 31, Year 1.
c. October 15, Year 1.
d. October 9, Year 1.
4. Tyler Corporation, a C corporation, uses a fiscal year ending October 31 and generally requests the
automatic extension of time for filing its return. Including the extension period, when is the due
date of Tyler Corporation’s tax return for the fiscal year ended October 31 (excluding Saturdays,
Sundays, or holidays)?
a. January 15.
b. August 30.
c. July 15.
d. August 15.
5. The amount required to be paid in estimated tax installments by a corporation is the lesser of 100%
of the tax shown on its return for the preceding 12-month tax year (if some tax was reflected), or
what percentage of the tax shown on its return for the current year (determined on the basis of
actual income or annualized income)?
a. 100%
b. 97%
c. 95%
d. 90%
6. If otherwise qualified, a “large corporation” (defined as a corporation with at least $1 million of
modified taxable income in any of the last 3 years) may use all of the following methods to figure all
four required installments of estimated tax EXCEPT
a.
b.
c.
d.
The 25% of the corporation’s income tax for the current year method.
The 25% of the corporation’s income tax for the preceding year method.
The annualized income installment method.
The adjusted seasonal installment method.
7. For the tax year 2018 what statement about the current corporate tax rates is TRUE:
a. Corporate taxable income is subject to tax under an eight-bracket graduated rate system.
b. The tax rate is 15% of the first $50,000 of taxable income.
c. The tax rate is 21% regardless taxable income level
d. The largest U.S. corporations pay a 35% marginal tax rate.
8. Generally, a short-period income tax return of a new C corporation must be filed by the 15th day of
the
a. Third month after the short period ends.
b. Fourth month after the short period ends.
c. Fourth month after the end of its first full tax year.
d. Third month after the end of its first full tax year.
9. ABC Corporation is a C corporation. Its tax year ends on October 31, Year 1. When is ABC
Corporation’s income tax return required to be filed?
a. January 31, Year 2.
b. February 15, Year 2.
c. January 15, Year 2.
d. February 28, Year 2.
10. Generally, if a C corporation has dissolved, its final income tax return must be filed by the 15th day
of the
a. Third month after the end of the calendar year.
b. Fourth month after the end of its established tax year.
c. Fourth month after the date it dissolved.
d. Third month after the date it dissolved.