ACC 565 WEEK 11 FINAL EXAM – STR
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ACC 565 WEEK 11 FINAL EXAM – STR
Parent and Subsidiary Corporations have filed calendar-year consolidated tax returns for several years. Parent Corporation uses the cash method of accounting while Subsidiary Corporation uses the accrual method of accounting. If Parent lends Subsidiary money,
Answer
the interest expense is deductible when accrued.
the interest expense and interest income may be reported in different consolidated return years.
the interest income is reported when the interest expense is accrued by Subsidiary.
the interest expense deduction is taken when Parent reports the interest income.
A consolidated return’s tax liability is owed by
Answer
all group members in equal portions.
the group member responsible for that portion of the tax liability.
all group members who are severely liable.
the parent corporation.
Albert contributes a Sec. 1231 asset to a partnership on June 1 of this year in exchange for a 10% partnership interest. He had purchased the asset on March 1, 2002. His holding period for the partnership interest begins
Answer
March 1, 2002.
March 2, 2002.
June 1 of the current year.
June 2 of the current year.
Meg and Abby are equal partners in the AM Partnership, which earns $40,000 ordinary income, $6,000 long-term capital gain (LTCG), and $2,000 Sec. 1231 loss during the current year. What is the amount and character of income that must be reported on Abby’s tax return for this year’s partnership operations?
Answer
$20,000 ordinary income, $3,000 LTCG, $1,000 Sec. 1231 loss
$19,000 ordinary income, $3,000 LTCG
$23,000 ordinary income, $1,000 Sec. 1231 loss
$22,000 ordinary income
Allen contributed land, which was being held for sale to Allen’s customers, to a...