Select from the pop-up boxes the best match for each significant fact or circums

ID: 2579445 • Letter: S

Question

Select from the pop-up boxes the best match for each significant fact or circumstance related to the 2017 tax year. Double-click on each blank box to see a list of answer choices and click on your selection. Each choice may be used once, more than once, or not at all. Personal Service Corporation Excluded from PHC income Reduces Accumulated earnings tax Self-assessment of PHC tax not required Reduces personal holding company tax liability in preceding year 35,000 exemption allowed in computing alternative minimum tax Positive adjustment in computing alternative minimum taxable income in year of sale Not considered a reasonable need of the business Answer Choices: Only $510,000 Sec. 179 expense allowable in current year No income reported on a consolidated return Tax Fact or Circumstance Answer I. Payment received for unique services rendered by a 20% owner of a computer programming corporation 2. Subject to regular income tax of S0.35 on each dollar of taxable income 3. C corporation with alternative minimum taxable income of $170,000 4. Addition to reserve for product liability loss 5. Realized gain deferred by vondealer under the installment method 6. Cash dividend paid on March 1 by calendar-year personal holding company 7. A building held for investment sold by a consolidating corporation to another member of the consolidating group, who uses it in its business 8. Addition to a reserve used to redeem stock 9. Personal holding company income of 55% of adjusted ordi 10. $535,000 in assorted equipment placed in service by two domestic C nary gross income corporations that are wholly owned by the same three unrelated individuals

Explanation / Answer

Tax Fact or Circumstance

Not considered a reasonable need of the business

Positive adjustment in computing alternative minimum taxable income in year of sale

Tax Fact or Circumstance

Answer Payment received for unique services rendered by a 20% owner of a computer programming corporation Personal Service Corporation Subject to regular income tax of $0.35 on each dollar of taxable income 35,000 exemption allowed in computing alternative minimum tax C corporation with alternative minimum taxable income of $170,000 Self-assessment of PHC tax not required Addition to reserve for product liability loss Reduces Accumulated earnings tax Realized gain deferred by non dealer under the installment method Excluded from PHC income Cash dividend paid on March1 by calendar-year personal holding company

Not considered a reasonable need of the business

A building held for investment sold by a consolidating corporation to another member of the consolidating group, who uses it in its business No income reported on a consolidated return Addition to a reserve used to redeem stock

Positive adjustment in computing alternative minimum taxable income in year of sale

Personal holding company income of 55% of adjusted ordinary gross income Reduces personal holding company tax liability in preceding year $535,000 in assorted equipment placed in service by two domestic C corporations that are wholly owned by the same three unrelated individuals Only $510,000 Sec.179 expense allowable in current year

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Select from the pop-up boxes the best match for each significant fact or circums

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