Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 20, Problem 13DQ
To determine
Discuss the fact behind the treatment of dividend received deduction for two small C Corporation.
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Quèstion 9
The corporate form of business has all the following advantages EXCEPT:
O A. The life of a corporation is unlimited and ease of capital accumulation.
O B. No mutual agency for stockholders.
OC. Stockholders have unlimited liabiliy.
O D. Separate legal entity.
The disadvantages are: (Select all the choices that apply.)
A. Income to a corporation is subject to double taxation, once at the corporate level and again when received by the owners in the form of a dividend.
B. The life of the business usually ends with the death of any of the owners.
C. The corporation is more complicated and more expensive to set up than other business entities.
D. Corporate liabilities can be passed on to the shareholders, thus making stock ownership primarily the realm of wealthy investors.
Chapter 20 Solutions
Individual Income Taxes
Ch. 20 - Prob. 1DQCh. 20 - LO.1 Sylvia and Trang want to enter into business...Ch. 20 - Prob. 3DQCh. 20 - Prob. 4DQCh. 20 - Prob. 5DQCh. 20 - LO.3, 4, 5 Contrast the income taxation of...Ch. 20 - LO.3, 8, 9 The taxpayer has generated excess...Ch. 20 - Prob. 8DQCh. 20 - Prob. 9DQCh. 20 - Prob. 10DQ
Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - LO.5 Beige Corporation has a fiscal year ending...Ch. 20 - Prob. 16DQCh. 20 - Prob. 17DQCh. 20 - Prob. 18DQCh. 20 - Prob. 19DQCh. 20 - Prob. 20DQCh. 20 - Prob. 21DQCh. 20 - Blaine, Cassie, and Kirstin are equal partners in...Ch. 20 - LO.3 Green Corporation, a calendar year taxpayer,...Ch. 20 - Prob. 24CECh. 20 - Prob. 25CECh. 20 - LO.4 Gold and Silver are two unrelated calendar...Ch. 20 - Prob. 27CECh. 20 - Prob. 28CECh. 20 - Prob. 29CECh. 20 - Prob. 30CECh. 20 - Prob. 31CECh. 20 - Prob. 32CECh. 20 - Prob. 33CECh. 20 - LO.3, 4, 5 Using the legend provided below,...Ch. 20 - LO.3 Garnet incurs the following capital asset...Ch. 20 - Prob. 36PCh. 20 - LO.3 Taupe, a calendar year taxpayer, has a...Ch. 20 - LO.3, 8 Robin incurred the following capital...Ch. 20 - Prob. 39PCh. 20 - Prob. 40PCh. 20 - Prob. 41PCh. 20 - Prob. 42PCh. 20 - Prob. 43PCh. 20 - Prob. 44PCh. 20 - Prob. 45PCh. 20 - Prob. 46PCh. 20 - Prob. 47PCh. 20 - Prob. 48PCh. 20 - Prob. 49PCh. 20 - Prob. 50PCh. 20 - During the current year, Thrasher (a calendar...Ch. 20 - Prob. 52PCh. 20 - Prob. 53PCh. 20 - Prob. 54PCh. 20 - Prob. 55PCh. 20 - LO.9 The Pheasant Partnership reported the...Ch. 20 - Prob. 57PCh. 20 - Prob. 58PCh. 20 - Prob. 59PCh. 20 - Prob. 1RPCh. 20 - Prob. 2RPCh. 20 - Prob. 3RPCh. 20 - Prob. 5RPCh. 20 - On January 1, year 5, Olinto Corp., an accrual...Ch. 20 - Prob. 2CPACh. 20 - Prob. 3CPACh. 20 - Prob. 4CPACh. 20 - Prob. 5CPACh. 20 - Prob. 6CPACh. 20 - Prob. 7CPA
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Similar questions
- 10. A company would repurchase its own shares for all of the following reasons except if it a.believes the shares are overvalued. b.wishes to increase the earnings per share. c.wishes to prevent unwanted takeover attempts. d.needs the shares for employee bonuses.arrow_forward46. Which of the following is not one of the advantages of organizing a business as a corporation? The ability to raise capital is perhaps easiest when organized as a corporation. b. The dividends paid to owners of a corporation are exempt from federal, state, and local taxes. c. The liability of owners of a corporation is limited to the amount they invested in the business. d. Transferring ownership of a business is by far the easiest within the corporate form of business organization. a. ftho following is an example of a direct cost an organization might incur in producing a proarrow_forwardexplain you answerarrow_forward
- . Buying shares in a corporation is attractive to investors because: a All of these answers are correct. b Shares are easily transferred c Shareholders are not liable for the corporation's actions and debts d Shareholders are not agents of the corporation e A corporation has unlimited life. PLEASE EXPLAIN YOUR ANSWER AND DO NOT COPY FROM OTHER SOURCES AND ALSO NOT GIVEN IN IMAGE FORMATarrow_forwardHh2. You are the controller of a mid-size private corporation. Your company’s shares are held by a small group of individuals, most of whom are in positions of upper management of the company. You yourself are NOT a shareholder. Your company is in technology and is looking to get additional capital so it can grow. Unfortunately, they can presently only produce ‘Notice to Reader’ Financial statements. How could Sage 50 benefit them as they grow, and need to get up to the point of providing CPA Reviewed or Audited financials?arrow_forwardWhich of the following statements are true regarding corporations? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. It has many of the same rights as an individual. The sale of shares from one stockholder to another does not impact operations. An exception is when it changes the makeup of directors. Stockholders are expected to hire and fire key executives. It does not end with the death of an owner. Corporate income that is distributed to shareholders is usually taxed twice. Corporations are often subject to fewer regulations than partnerships. The president and vice presidents choose the board of directors.arrow_forward
- Which of the following would not be true of a privately held corporation? * It is sometimes called a closely held corporation. Its shares are regularly traded on the New York Stock Exchange. It does not offer its shares for sale to the general public. It is usually smaller than a publicly held company.arrow_forwardWrite T if the statement is correct and F if the statement is incorrect. On the space provided, explain using the concepts discussed why your answer to a statement is T or F. 1. A person of minor age can be a shareholder but can never be an incorporator in a corporation. 2. A corporation can be an incorporator in another corporation. 3. A share certificate can be issued to those subscribers who partially paid their subscriptions. 4. A corporation or business partnership can be an incorporator but not a corporator. 5. All partnership can be an incorporator in a corporation. 6. On January 10,2021, Ana paid 90% of her subscription in Jollibee Foods Corporation. She will receive her certificate of stock on January 10,2021. 7. Continued inoperation of a corporation for at least 5 consecutive years will result in its certificate of incorporation being deemed revoked. 8. In case of conflict between the by-laws and the corporation code, the code shall prevail.arrow_forward6. These give the holders the privilege to purchase shares of stocks at a price lower than the prevailing market price of the shares upon the issuance of new shares. 7. The difference of if the issue price is less than the par or stated value of the share. 8. A corporation which has no share capital and where no part of its income is distributable as dividends to its members. 9. A private corporation tasked by the government to provide public service. 10. The SEC issues the certificate of incorporation after this document is filed and duly approved.arrow_forward
- Assume that you are a shareholder in On-the-Move Corporation. The company has just changed its debt-equity ratio from 0.29 to 0.38. If you prefer the old capital structure, you should: Multiple Choice O sell some shares and loan out the sale proceeds. do nothing. borrow funds and purchase more shares. sell some shares and hold the sale proceeds in cash. sell all of their shares and loan out the entire sale proceeds.arrow_forwardChapter 11 - Question 2: (a) What is meant by the limited liability of a stockholder? (b) Does this characteristic enhance or reduce a corporation’s ability to raise capital? (c) Explain.arrow_forwardWhich of the following is NOT a consequence of the double tax on dividends? Question 15 options: Corporations have an incentive to retain earnings and structure distributions to avoid dividend treatment. Corporations have an incentive to invest in non-corporate rather than corporate businesses. The cost of capital for corporate investment is increased. Corporations have an incentive to finance operations with debt rather than equity. All of the above are consequences of the double tax on dividends.arrow_forward
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