Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Chapter 11, Problem 20MCQ
To determine
Introduction: To operate a business, a taxpayer generally chooses between individual trading,
To choose: The true statement regarding corporate alternative minimum tax (AMT).
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Students have asked these similar questions
Corporations are taxed on the income they earn, and shareholders are taxed on the dividends they receive. What provisions in the tax law reduce this "double tax" burden? (Assume the year is 2018.)
C
O A. Dividends received by individuals are taxed at lower rates than other income. There is no tax on dividends received by individuals in the 10% tax bracket. Dividends received by individuals in the 12% through 35% brackets are taxed at 15% while individuals in
the 37% tax bracket are taxed at 20%. In addition, eligible corporations can elect to be treated much like partnerships. The income of these so-called "S corporations" is reported by shareholders, and is not taxed to the corporation. In addition, corporations
receiving dividends from other corporations are eligible to claim a dividend-received deduction that varies between 50% and 100% of the dividends received depending on the percentage of stock owned.
There are no provisions in the tax law to reduce the "double tax" burden.…
Which of the following statements is/are correct?
A. A minimum corporate income tax (MCIT) of 1% of gross income from July 1, 2020 to
June 2023 and 2% beginning July 1, 2023 is imposed upon any domestic corporation
and resident foreign corporation beginning on the 4th taxable year immediately
following the taxable year in which such corporation commenced its business
operations.
B. MCIT shall be imposed whenever such corporation has zero or negative taxable
income, or when the amount of MCIT is greater than the normal income tax due from
such corporation.
C. The computation and the payment of the MCIT, shall likewise apply at the time of
filing the quarterly corporate income tax.
A. I only
B. II only
C. I and III only
D. I, II and III
Which of the following statements is true?
All corporations are subject to AMT.
Small corporations with average annual gross receipts of less than $10 million are not subject to AMT.
The Tax Cuts and Jobs Act of 2017 repealed the corporate alternative minimum tax (AMT) beginning in 2018.
The AMT rate is 25% of AMT income after exemption.
Chapter 11 Solutions
Income Tax Fundamentals 2020
Ch. 11 - Ironwood Corporation has ordinary taxable income...Ch. 11 - Tayla Corporation generated $400,000 of taxable...Ch. 11 - Prob. 3MCQCh. 11 - Harrison Corporation generates capital...Ch. 11 - Prob. 5MCQCh. 11 - Prob. 6MCQCh. 11 - Prob. 7MCQCh. 11 - The purpose of Schedule M-1 on the corporate tax...Ch. 11 - Prob. 9MCQCh. 11 - Prob. 10MCQ
Ch. 11 - Prob. 11MCQCh. 11 - Prob. 12MCQCh. 11 - Prob. 13MCQCh. 11 - Prob. 14MCQCh. 11 - Prob. 15MCQCh. 11 - Prob. 16MCQCh. 11 - Prob. 17MCQCh. 11 - Prob. 18MCQCh. 11 - Prob. 19MCQCh. 11 - Prob. 20MCQCh. 11 - Prob. 21MCQCh. 11 - Quince Corporation has taxable income of $485,000...Ch. 11 - Prob. 2PCh. 11 - For its current tax year, Ilex Corporation has...Ch. 11 - DeMaria Corporation, a calendar year corporation,...Ch. 11 - Fisafolia Corporation has gross income from...Ch. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - The Loquat Corporation has book net income of...Ch. 11 - Caloundra Corporation has book income of $ 40,000....Ch. 11 - Prob. 10PCh. 11 - Prob. 11PCh. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Grevilla Corporation is a manufacturing company....Ch. 11 - Prob. 15P
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