strayer acc565 full course [ all assignments all discussion and final exam ]

strayer acc565 full course [ all assignments all discussion and final exam ]

Question # 00019544 Posted By: vikas Updated on: 07/10/2014 12:30 AM Due on: 08/21/2014
Subject Accounting Topic Accounting Tutorials:
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ACC565 Week 1 Discussions

Tax Representation Guidelines" Please respond to the following:

•Compare the American Institute of CPAs’ (AICPA) Statements on Tax Standards (SSTS) and the Treasury Department Circular 230 rules to practice before the Internal Revenue Service (IRS). Suggest which document creates better guidance in the preparation of tax returns and written advice provided to taxpayers.

•Imagine that you are a CPA, and there is a conflict in the Circular 230 and the SSTS. Identify the guidelines that you would use, and support your selection


"Interpreting Tax Research" Please respond to the following:

•From the e-Activity, evaluate the importance of the principal issue litigated in the case in question, using the tax research steps outlined in Appendix A of your text.

•From the e-Activity, give your opinion on the adequacy of the ruling in the case based on the Medicare guidelines, petitioners expensing policy, and the tax laws identified in the case.








Discussion 1

"Transfers to Controlled Corporations" Please respond to the following:

Create a scenario where the transfer of property to a controlled corporation under Section 351 of the Internal Revenue Code (IRC) results in the taxation to the transferor. Evaluate the fairness of the taxation of the transaction to the transferor. Provide a tax-planning strategy to prevent taxation of similar transfers.

From the e-Activity, examine the differences in the treatment of nonmonetary transactions in corporate formations under GAAP versus under Section 351 of the IRC. Suggest the main possible reason for these differences.

Discussion 2

"Related Party Losses" Please respond to the following:

Section 267 of the IRC disallows a deduction on losses realized on the sale of property and a deduction for accrued expenses between a corporation and a controlling shareholder. GAAP does not include this disallowance provision. Create an argument for allowing a loss on a sales transaction between a controlled corporation and shareholder when the transaction includes an independent appraisal and the loss is similar to losses incurred in arm’s length transactions. Provide an example to support your argument.

Suppose clients request that their tax return preparation include the loss on the sales transaction identified between the controlling shareholder and corporation, as described in Part 1 of this discussion. Analyze the potential impact and required disclosures resulting from the inclusion on the financial statements and the tax return of the corporation. Examine the implications of the uncertain tax position in this situation on the requirements of Circular 230 and the Statements on Tax Standards (SSTS).



week 3
Section 306 of the IRC was enacted by Congress to prevent tax avoidance by distributing certain stock to a shareholder in a nontaxable stock dividend. Section 306 prevents shareholders from using a preferred stock bailout to convert ordinary income into a capital gain. Analyze the key provisions of Section 306 of the IRC, and outline a tax- planning strategy geared toward redeeming preferred stock with sale or exchange treatment as an alternative to Section 306.


ACC565 Week 3 Discussion 2

Per the text, the personal holding company (PHC) tax penalizes taxpayers that enter into tax-motivated transactions designed to shelter passive income of closely held corporations from higher individual tax rates. Suppose you represent a professional athlete who is the majority owner of a corporation. The corporation has several personal service contracts with advertising agencies and endorsements for your client in addition to passive income. Propose a plan in which you eliminate the potential for the PHC tax on the client’s corporation.

The same client provides significant information on passive income at the end of the year, creating a potential PHC tax liability. Outline a plan for the current year in which you reduce the total tax liability for the client and include a proposal for future years to prevent PHC tax liability


week 4


"Corporate Liquidations" Please respond to the following:

From the e-Activity, evaluate the appropriateness of the techniques used and the common issues pursued by the IRS in corporate liquidations and dissolutions. Create an argument to defend the client if the IRS pursues the assignment of income doctrine or the clear reflection of income doctrine on a cash-basis corporation, as reflected in the Examining Officers Guide (EOG).

Outline a plan of liquidation for a client that liquidates two (2) years after incorporation by transferring loss property under IRC Section 351. The plan of liquidation should be defensible against the IRS in an audit that challenges the plan as having a tax-avoidance purpose. Analyze the consequences in an IRS audit of a subsequent reincorporation after a corporate liquidation and recognition of losses.


Discussion 2

"Taxable Acquisition Transactions and Nontaxable Reorganizations" Please respond to the following:

IRC Section 338 allows a deemed sale election generating immediate taxation to the target corporation and a stepped-up or stepped-down basis to the price paid by the acquiring corporation for the target corporation stock plus liabilities on the deemed sale. Examine at least one (1) benefit of a Section IRC 338 liquidation election for a target corporation. Create a situation which demonstrates a favorable Section IRC 338 liquidation election for a target corporation.

Identify one (1) consequence of a nontaxable reorganization, and offer an alternative to eliminate the negative effect of the identified consequence.






"Consolidated Net Operating Losses and Intercompany Transactions" Please respond to the following:

  • A client is pursuing the acquisition of Corporation A that has a substantial net operating loss. Corporation B is a member of the controlled group and is currently included in the consolidated tax return that also has a net operating loss. Analyze the potential advantages and disadvantages of Corporation B’s acquisition of Corporation A and Corporation A’s subsequent inclusion in Corporation B’s consolidated tax return. Suggest the key tax issues the client should consider in determining the deductibility of the net operating losses.
  • From the e-Activity, create a tax-planning strategy for a client geared toward complying with the final regulations issued by the IRS under Code Section 267 (f). (Note: Code Section 267 (f) discusses the time taken into account for deferred losses on the sale or exchange of property between members of a controlled group.) Recommend the alternatives that you believe would be best suited for the client to use in order to both take advantage of losses between members and remain in compliance with related regulations. Justify your response.

ACC565 WEEK 5 DISCUSSION 2

"Consolidated Tax Returns" Please respond to the following:

  • Corporations P, S, and C are members of a parent-subsidiary controlled group filing a consolidated tax return. Corporations A and B are members of a brother-sister controlled group that cannot file a consolidated tax return. Design a strategy geared toward creating an affiliated group which makes Corporations A, B, P, S, and C all eligible to file a consolidated tax return.
  • Assess the adequacy of the schedule M-3 Part 1 in creating transparency between the consolidated financial statements and the consolidated tax returns of the corporations discussed in the first part of this discussion. Suggest at least two (2) modifications to the M-3 that you can use to identify possible issues the IRS would most likely examine on a consolidated tax return.


WEEK 6 DISCUSSION 1

"Partnership Tax Year" Please respond to the following:

  • The IRC restricts the choices for a partnership‘s tax year to prevent the deferral of tax. This causes most partnerships to adopt a calendar year for tax reporting. From the e-Activity, create a scenario using a fiscal tax year which allows a partnership to defer taxes that meet the requirements of Sections 706 and 444 of the IRC.
  • Suggest at least one (1) major reason why Congress allowed the exception to the calendar year for partnership tax year elections.

WEEK 6 DISCUSSION 2

"Limited Liability Partnerships" Please respond to the following:

  • As discussed in the text, large accounting firms and other professional firms operate as limited liability partnerships (LLPs). Contrast the LLP form of business under state laws to the LLP for tax purposes.
  • Suggest the major reasons why a new entity would choose a LLP over a traditional partnership for tax purposes.


week 7

"Deductibility of S Corporation Losses and Deductions" Please respond to the following:

Per the text and IRC, losses and deductions of an S corporation pass through to the shareholders of the corporation and are limited to the shareholders’ basis in the S corporation. Suggest a plan for a client to increase the deductible pass through loss and deductions over the initial investment from a new wholly owned S corporation.

Analyze the major advantages and disadvantages of using the plan you created on tax planning in the first part of this discussion for future years.

Week 7 Discussion 2

"S Corporation Distributions and Taxation" Please respond to the following:

From the e-Activity, differentiate between the treatment of S corporation distributions from corporations having no earnings and profits, and corporations having accumulated earnings and profits. Suggest the most significant reason for the difference in the treatment of distributions. Justify your response.

Per the text, Last In, First Out (LIFO) recapture tax and built-in gains tax are applied to S corporations at the corporate level. Create a tax-planning strategy to prevent the S corporation from the payment of these taxes.


week 8

Per the text and IRC, a gift occurs when the transfer of property is complete and the gift is valued at the date of the transfer. Imagine a scenario in which a client creates an irrevocable trust for his two (2) grandchildren to ensure college education expenses are paid. The trust agreement requires the distribution of the income from the trust directly to the college or university the grandchildren attend for tuition while they are in college and directly to the grandchildren until age twenty-five (25) after completing college. The income from the trust is distributed directly to the grandchildren until they reach age twenty-five (25), if they do not attend college. When the grandchildren celebrate their twenty-fifth (25th) birthday, the income stream distribution reverts to the client’s spouse, and the spouse receives the property upon the death of the client. Examine the gift tax consequences of the transaction based on the use of the irrevocable trust, as compared to direct payments to the grandchildren
  • From the e-Activity and the scenario from Part 1 of this discussion, create a tax strategy which ensures that gift tax is paid on the property prior to the death of the client and that the client may use the full benefit of the gift-splitting election.


  • Discussion 2

    Per the text, gift tax-planning strategies can reduce tax for estate tax-planning purposes. Estate tax planning is very important for wealthy clients. Examine one (1) tax-planning strategy that a CPA could use for lifetime giving that would reduce overall estate and gift taxes for a client.



  • week 9


  • "Fairness of the Federal Estate Tax" Please respond to the following:

    • Per the text, a voluntary compliance system is built on the fairness of the system. The federal estate tax is often referred to as a death tax on wealthy individuals. The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 provided for periodic increases in the exemption amount for decedents who die after December 31, 2001, until the filing threshold reached $3.5 million in 2009. The tax was repealed in 2010 and later reinstated beginning in 2011. From the e-Activity, determine one (1) major factor contributing to the fairness of estate taxes on wealthy individuals prior to EGTRRA and the current structure of the federal estate tax.
    • Per the text, several arguments exist for the repeal of the estate tax. From the e-Activity, defend the most significant argument advanced in the repeal of the estate tax by its opponents. Justify your

    Discussion 2

    "Income and Principal in Fiduciary Accounting" Please respond to the following

    The Uniform Principal and Income Act of 2000 (Uniform Act) allows the trustee to make adjustments between the principal and income accounts as necessary under certain requirements. Examine the major reasoning for allowing such transfers by the trustee and recommend alternatives to the allowance of the adjustments. Justify your response.

    Create a scenario that demonstrates an adverse effect on the remainderman resulting from a transfer between principal and income by the trustee.



  • week 10



  • Imagine a situation in which a client under audit by the IRS omitted $100,000 in income. From the e-Activity, examine the major factors relative to the omission by the client that would result in a criminal investigation, rather than a civil fraud proposal by the IRS.

    Evidence of Fraud


    Based on the scenario in the first part of this discussion, suggest at least one (1) strategy that the client should use in defense of a criminal case pursued. Provide a rationale for your response.



    week 10 dis 2

    Discussion 2

    Per the text, a U.S. parent company does not include the income of a foreign subsidiary until the income is repatriated as dividends. Defend the creation of foreign subsidiaries as a mechanism to defer income of major U.S. companies. Propose a new tax law that will benefit the U.S. Treasury from the deferral of income from foreign subsidiaries and encourage the repatriation of the previously deferred income.


    Examine the current provisions of the IRC designed to prevent tax avoidance between a U.S. corporation and a foreign subsidiary, and evaluate the importance of using advance pricing agreements (APAs) to execute such provisions. Defend orcritique the confidentiality treatment of APAs under the Freedom of Information Act (FOIA). Justify your position.


  • week 11


  • Discussion 1

    "Learning Experience" Please respond to the following:

    From the lessons and conceptual ideas presented in this course, determine the single most impactful or interesting lesson / concept you have learned. Provide a rationale for your response.

    Assume you have the power to make reforms to the way tax research and planning is currently conducted. Propose the reforms you would make. Justify your response

    Discussion 2

    "Application of Knowledge" Please respond to the following:

    Identify the content from this course that you believe will be the most useful to you in the future. Provide at least one (1) specific example to support your response.

    Speculate on the most significant changes you expect to see in the tax code over the next five (5) years. Explain your reasoning.





  • Assignment 1: Client Letter

    Imagine that you are a Certified Public Accountant (CPA) with a new client who needs an opinion on the most advantageous capital structure of a new corporation. Your client formed the corporation in question to provide technology to the medical profession to facilitate compliance with the Health Insurance Portability and Accountability Act (HIPAA). Your client is very excited because of the ability to secure several significant contracts with sufficient capital.

    Use the Internet and Strayer databases to research the advantages and disadvantages of debt for capital formation versus equity for capital formation of a corporation. Prepare a formal letter to the client using the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide.

    Write a one to two 600- 650 page letter in which you:

    1. Compare the tax advantages of debt versus equity capital formation of the corporation for the client.

    2. Recommend to the client whether he / she should use debt or equity for capital formation of the new corporation, based on your research. Provide a rationale for the response.

    3. Use the six (6) step tax research process, Provided below to record your research for communications to the client.




    Week 4 Assignment 2

    Assignment 2 :Constructive Dividends, Redemptions, and Related Party Losses

    Suppose you are a CPA hired to represent a client that is currently under examination by the IRS. The client is the president and 95% shareholder of a building supply sales and warehousing business. He also owns 50% of the stock of a construction company. The remaining 50% of the stock of the construction company is owned by the client’s son. The client has received a Notice of Proposed Adjustments (NPA) on three (3) significant issues related to the building supply business for the years under examination. The issues identified in the NPA are unreasonable compensation, stock redemptions, and a rental loss. Additional facts regarding the issues are reflected below:

    · Unreasonable compensation: The taxpayer receives a salary of $10 million composed of a $5 million base salary plus 5% of gross receipts not to exceed $5 million. The total gross receipts of the building supply business are $300 million. The NPA by the IRS disallows the salary based on 5% of gross receipts as a constructive dividend

    · Stock redemptions: During the audit period, the construction company redeemed 50% of the outstanding stock owned by the client and 50% of the stock owned by the client’s son, leaving each with the same ownership percentage of 50%. The redemption was treated as a distribution under Section 301 of the IRC by the IRS.

    · Rental loss: The rental loss results from a building leased to the construction company owned by the client and his son.

    Write a three page paper in which you:

    1. Based on your research and the facts stated in the scenario, prepare a recommendation for the client in which you advise either acceptance of the proposed adjustments or further appeal of the issue based on the potential for prevailing on appeal.

    2. Create a tax plan for the future redemption of the client’s stock owned in the construction company that will not be taxed according to Section 301 of the IRC.

    3. Propose a strategy for the client to receive similar amounts in compensation in the future and avoid the taxation as a constructive dividend.

    4. Use the six (6) step tax research process to record your research for communications to the client.

    Use the Internet and databases to research the rules and income tax laws regarding unreasonable compensation, stock redemptions treated as dividends and related party losses. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.




    ACC565 Week 7 Assignment 3

    Assignment 3: Reorganizations and Consolidated Tax Returns

    Due Week 7 and worth 250 points

    Suppose you are a CPA, and you have a corporate client that has been operating for several years. The company is considering expansion through reorganizations. The company currently has two (2) subsidiaries acquired through Type B reorganizations. The client has asked you for tax advice on the benefit of a Type A, C, or D reorganization over a Type B reorganization. Additional facts regarding the issues are reflected below.

    • The company currently files a consolidated income tax return with the two (2) subsidiaries acquired through a Type B reorganization.
    • ABC Corporation, a subsidiary targeted by the client for takeover, has substantial net operating losses.
    • XYZ Corporation and BB Corporation will be acquired as subsidiaries in the next six (6) months.

    Use the Internet and Strayer databases to research the rules and income tax laws regarding Types A, B, C, and D reorganizations and consolidated tax returns. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.

    Write a four to six (4-6) page paper in which you:

    1. Compare the long-term tax benefits and advantages of each type of reorganization, and recommend the type of reorganization that will be most beneficial to the client.
    2. Suggest the type of reorganization the client should use for the ABC Corporation based on your research. Justify the response.
    3. Propose a taxable acquisition structure for the client’s planned acquisitions over a nontaxable reorganization. Assess the value of a taxable transaction over a nontaxable reorganization for the client.
    4. Examine the value and limitations of including the ABC Corporation if acquired as a wholly owned subsidiary in the consolidated return, and provide a recommendation to your client. Support the recommendation with applicable research.
    5. Create a scenario that will allow the client to reduce any disadvantages from filing a consolidated return as a member of a controlled group.
    6. Use the six (6) step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook, to record your research for communications to the client.

    Your assignment must follow these formatting requirements:

    • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
    • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

    The specific course learning outcomes associated with this assignment are:

    • Prepare client, internal, and administrative documents that appropriately convey the results of tax research and planning.
    • Evaluate tax-planning strategies related to liquidating distributions, acquisitions, and reorganizations.
    • Create an approach to tax research that results in credible and current resources.
    • Research and analyze tax issues regarding consolidated tax returns.
    • Use technology and information resources to research issues in organizational tax research and planning.
    • Write clearly and concisely about organizational tax research and planning using proper writing mechanics.


    Assignment 4: Tax-Planning Client Letter on Irrevocable Trusts, Gift Tax, and Estate Tax

    Due Week 10 and worth 150 points

    Suppose you are a CPA, and your client has requested advice regarding establishing an irrevocable trust for his two (2) grandchildren. He wants the income from the trust paid to the children for 20 years and the principal distributed to the children at the end of 20 years.

    Use the Internet and Strayer databases to research the rules regarding irrevocable trusts, gift tax, and estate tax. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.

    Write a one to two (1-2) page letter in which you:

    1. Analyze the effect of an irrevocable trust on the gift tax and future estate taxes.
    2. Suggest other significant alternatives that the client could use both to reduce estate tax and to maximize potential advantages of the payment of gift taxes on transfers of property.
    3. Use the six (6) step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook, to record your research for communications to the client.

    Your assignment must follow these formatting requirements:

    • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
    • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

    The specific course learning outcomes associated with this assignment are:

    • Prepare client, internal, and administrative documents that appropriately convey the results of tax research and planning.
    • Create an approach to tax research that results in credible and current resources.
    • Analyze tax issues regarding the gift tax and the estate tax.
    • Analyze tax issues regarding trusts and estates.
    • Use technology and information resources to research issues in organizational tax research and planning.
    • Write clearly and concisely about organizational tax research and planning using proper writing mechanics.



    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 partnership in exchange for a 20% interest. The partnership uses the land in its business for three years and then sells the property. When the property was contributed, it had a basis in Allen's hands of $500,000 and an FMV of $600,000. The partnership sells the land for $700,000. The gain reported by the partnership is

    Answer

    $100,000 of ordinary income and $100,000 of Sec. 1231 gain.

    $100,000 of Sec. 1231 gain and $100,000 of capital gain.

    $200,000 of ordinary income.

    $200,000 of Sec. 1231 gain.

    The AB Partnership has a machine with an FMV of $25,000 and a basis of $20,000. The partnership has taken an $8,000 depreciation on the machine. The unrealized receivable related to the machine is

    Answer

    $0.

    $5,000.

    $8,000.

    $20,000.

    The definition of "inventory" for purposes of Sec. 751 includes

    Answer

    cash.

    land held for investment.

    marketable securities not held by dealers.

    depreciation recapture potential on Sec. 1231 assets.

    An S corporation is not treated as a corporate taxpayer with respect to which one of the following fringe benefits?

    Answer

    stock options

    qualified retirement plans

    group term life insurance premiums

    nonqualified deferred compensation

    Which one of the following individuals or entities is ineligible to be an S corporation shareholder?

    Answer

    an estate

    resident alien of the United States

    a voting trust where all of the beneficiaries are U.S. citizens

    a partnership where all of the partners are U.S. citizens

    The recognition period for the built-in gains tax extends for how many years after the S election takes effect?

    Answer

    one year

    three years

    five years

    ten years

    In 1998, Delores made taxable gifts to her son of property with an FMV of $200,000. In the current year when Delores dies, the property is worth $800,000. The amount included in Delores's estate tax base because of the 1998 gift is

    Answer

    $0.

    $189,000.

    $200,000.

    $800,000.

    Hu makes a gift of his home to a local homeless shelter (a 501(c)(3) charity). Hu will retain his home for 10 years, after which the homeless shelter will take possession. The value of Hu's 10-year interest is $30,000 and the remainder interest is valued at $120,000. Which of the following statements is correct?

    Answer

    Hu is allowed a charitable deduction on his gift tax return for $150,000 in the current year.

    Hu is allowed an exclusion of $12,000 on his gift of $120,000 to the charity.

    Hu is not allowed to deduct the contribution until the charity takes possession in 10 years.

    Hu has a charitable contribution deduction of $120,000 on his current gift tax retur

    Gordon died on January 1 and by his will left land with an adjusted basis of $60,000 and an FMV of $100,000 to Becky. Becky disclaims the property on December 31 of the year of death, when the land was still worth $100,000. Becky has made a gift (before the annual gift tax exclusion) of

    Answer

    $100,000.

    $60,000.

    $50,000.

    $0.

    In 2012, Paul transfers $1,000,000 to a trust benefiting his three children. As trustee, he has the power to determine the amount of distributions each year. Paul dies in the current year when the trust has a value of $1,200,000. How much of the trust's value is included in Paul's estate?

    Answer

    $0

    $400,000

    $1,000,000

    $1,200,000

    Following are the fair market values of Wilma's assets at her date of death:

    Personal effects and jewelry

    $150,000

    Land which Wilma bought and held as a joint

    tenant with right of survivorship with her sister

    800,000



    The executor of Wilma's estate did not elect the alternate valuation date. The amount includible in Wilma's gross estate is

    Answer

    $150,000.

    $550,000.

    $800,000.

    $950,000.

    Four years ago, David gave land to Mike that he purchased for $70,000, which is presently worth $100,000. Three years ago, Mike exchanged the land (then worth $150,000) along with a $100,000 cash contribution made by David for a new piece of land worth $250,000. The new land is titled with David and Mike as joint tenants with the right of survivorship. When Mike dies this year, the land is worth $300,000. Mike's estate will include

    Answer

    $0.

    $150,000.

    $180,000.

    $300,000.

    Administration expenses incurred by an estate

    Answer

    are deductions in respect of a decedent and may be deducted on both the estate tax return (Form 706) and the estate income tax return (Form 1041).

    an executor must elect where to deduct administration expenses (Form 706 or
    Form 1041).

    such expenses are only deductible on Form 706.

    such expenses are only deductible on Form 1041

    The conduit approach for fiduciary income tax means

    Answer

    the distributed income has the same character in the hands of the beneficiary as it has to the trust.

    the distributed income goes to all beneficiaries proportionately.

    the distributed income is determined by the trustee annually.

    the distributed income of a remainder interest is determined by the property.

    Which of the following activities is protected by accountant-client privilege?

    Answer

    written communications between a CPA and a corporation regarding a tax shelter

    communications related to tax return preparation

    communications related to criminal tax evasion

    advice given regarding tax issues in a divorce

    Terry files his return on March 31. The return shows taxes of $6,000, and Terry pays this entire amount when he files his return. By what time must he file a claim of refund?

    Answer

    the later of two years from the return filing or three years from the date the tax is paid

    the later of three years from the return due date or two years from the date the tax is paid

    two years from the payment of tax date, if the IRS mails a notice of deficiency in the third year following the due date of the return

    four years from the payment of tax date, if the IRS mails a notice of deficiency

    Gerald requests an extension for filing his last year's individual income tax return. His tax liability is $10,000, of which $8,000 was withheld, leaving a balance due of $2,000 when he files on August 1 of the current year. His penalty for failure to pay the tax on time is

    Answer

    $0.

    $40.

    $300.

    $400.

    U.S. citizen Barry is a bona fide resident of a foreign country for all of 2013. Barry uses a calendar year as his tax year and receives $158,000 in salary and allowances from his employer. Included in the $158,000 is a $25,000 housing allowance. Barry's housing costs are $30,000. The base housing amount for the current year is $15,616. What amount related to his housing can Barry exclude on his Form 2555?

    Answer

    $14,384

    $25,000

    $30,000

    $13,545

    U.S. citizen who has a calendar tax year establishes a tax home and residence in a foreign country and qualifies for the foreign-earned income exclusion for 60 days in 2010; 365 days in 2011; and 60 days this year, 2012. The maximum earned income exclusion for this year is?

    Answer

    $13,733

    $16,044

    $13,151

    $17,522

    What are the carryback and carryforward periods for the foreign tax credit?

    Answer

    back two years; forward five years

    back three years; forward ten years

    back one year; forward ten years

    back two years; forward twenty years

    Charitable contributions made by a fiduciary

    Answer

    are limited to 50% of fiduciary income.

    must be authorized in the trust instrument in order to be deductible.

    flows through to be deducted on the beneficiary's tax return.

    are subject to the 2% floor.

    Administration expenses incurred by an estate

    Answer

    are deductions in respect of a decedent and may be deducted on both the estate tax return (Form 706) and the estate income tax return (Form 1041).

    an executor must elect where to deduct administration expenses (Form 706 or
    Form 1041).

    such expenses are only deductible on Form 706.

    such expenses are only deductible on Form 1041.



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