Subject : Accounting 1. Which of the following is NOT true?a. NOL carryforwards are indefinitely and carrybacks are not allowed.b. Business meals are deductible.c. NOL carryforwards can deduct up to 80% of taxable income.d. Business entertainment is deductible.2. Which of the following is NOT true?a. Individual taxpayers claim the loss of worthless securities in the year when the stockbecame worthless as capital loss.b. Individual taxpayers can claim the casualty loss in the year of damage or amend theprior year return as an itemized deduction.c. Related party loss is not deductible.d. The amount of deductible casualty loss for a completely destroyed business property isthe lesser of adjusted basis of the property or the decline in fair market value.3. Which of the following is true for IRAs and 401(k)?a. The maximum amount of annual contributions to IRA and 401(k) are the same.b. Roth IRA contribution is the deduction for AGI.c. Traditional IRA contribution is the deduction from AGI.d. Qualified withdraw from Roth IRA is tax-free4. A single taxpayer with $74,000 of AGI, for 2022. How much is his/her contribution to atraditional IRA is non-deductible? Assume the employer offers a 401k plan and he/shecontributed to the maximum amount.

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Answered: 1. Which of the following is NOT true?…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 11MCQ

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Taxpayers can deduct a nonbusiness bad debt beginning in the year it is deemed partially worthless. True or false
Which of the following is not true about capital assets? a.Individual taxpayers may deduct net capital losses of up to $3,000 per year. b.Real property used in a trade or business is not a capital asset. c.Net long-term capital gains are granted preferential tax treatment. d.Shares of stock held for investment are capital assets. e.Capital losses may be carried back for 3 years to offset capital gains in those years.
Which of the following statements about credits is false? A. Credits reduce a taxpayer's liability dollar for dollar. B. Not all credits are refundable. C. The CARES Act stimulus payments were advance credits for 2020. D.Nonrefundable credits are limited to the tax balance due.
TRUE OR FALSE Interest treated as capital expenditures is a deductible interest expense. There is no tax benefit when the company chooses to source out funds by borrowings. 15% capital gains tax on net capital gains is imposed to investors whose sale of stocks which is not listed or traded in the LSE.
Recovery of bad debt written off by a taxpayer: No.1: P20,000 from accounts written off in a year which had a net income of P200,000 before write-off. (Write-off of the year was P20,000) No.2: P5,000 from accounts written off in a year which had a net loss before write-off of P36,000. (Write-off for the year was P5,000) No.3: P10,000 from accounts written off in a year which had a net income of P8,000 before write-off. (Write-off for the year was P8,000) The income from the bad debt recovery is: a. P35,000 b. P20,000 c. P26,000 d. P30,000
Please answer ASAP 12. Loss is generally considered a tax relief and can be carried forward to the following trading year and offset against the profit for that year. A company operating in Country A with the following tax loss rules. i. There is no cap on the number of years for which losses may be carried forward. ii. There is no cap is applicable for the first five years of assessment next following the year of assessment in which the taxpayers started a trade, business, or profession. iii. There is no cap available where a taxpayer (whether individual or company) whose gross turnover is below $10,000,000 per annum. iv. The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year. In 2022, ABC Limited, a company registered in Country A, had a trading profit of $3,000,000. The company started business in 1997 and its gross revenue was $15,000,000 for the tax year. Prior year tax losses are $4,000,000. It's loss relief for that year is.…
Which of the following has the greatest effect of reducing tax payable through the acceleration of deductions? a. Writing off any bad debts before the end of the income year. b. Value trading stock at market selling value where the market selling value is higher than the cost or replacement price. c. Ensuring investments are positively geared. d. Value trading stock at market selling value where the market selling value is higher than thecost or replacement price.
The tax law requires that capital gains and losses be separated from other types of gains and losses. Among the reasons for this treatment are: a."Long-term capital gains may be taxed at a lower rate than ordinary gains" and "Net capital loss is deductible only up to $3,000 per year for individual taxpayers". b.Short-term capital losses are not deductible. c.Net capital loss is deductible only up to $3,000 per year for individual taxpayers. d.Long-term capital gains may be taxed at a lower rate than ordinary gains.
Deferred income taxes result from: a. The fact that bond interest is deductible in the computa-tion of taxable income. b. Depositing income taxes due in future years in a specialfund managed by an independent trustee.c. Differences between certain revenue and expense itemsrecognized in financial statements but not in income taxreturns.d. The inability of a bankrupt company to pay its incometax liability on schedule.
Loss is generally considered a tax relief and can be carried forward to the following trading year and offset against the profit for that year. A company operating in Country A with the following tax loss rules. i. There is no cap on the number of years for which losses may be carried forward. ii. There is no cap is applicable for the first five years of assessment next following the year of assessment in which the taxpayers started a trade, business, or profession. iii. There is no cap available where a taxpayer (whether individual or company) whose gross turnover is below $10,000,000 per annum. iv. The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year. In 2022, ABC Limited, a company registered in Country A, had a trading profit of $3,000,000. The company started business in 1997 and its gross revenue was $15,000,000 for the tax year. Prior year tax losses are $4,000,000. It’s loss relief for that year is. a. $1,500,000…
Which of the following creates temporary difference between financial and taxable income? * Interest on treasury debt securities Accelerated depreciation on plant and equipment O Fines from vilation of law Premiums paid for officer's life insurance (comapny is beneficiary)
Loss is generally considered a tax relief and can be carried forward to the following trading year and offset against the profit for that year. A company operating in Country A with the following tax loss rules. i. There is no cap on the number of years for which losses may be carried forward. ii. There is no cap applicable for the first five years of assessment following the year of assessment in which the taxpayers started a trade, business, or profession. iii. There is no cap available where a taxpayer (whether individual or company) whose gross turnover is below $10,000,000 per annum. iv. The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year. In 2022, LMP Limited, a company registered in Country A, had a trading profit of $5,000,000. The company started business in 2020 and its gross revenue was $9,000,000 for the tax year. Prior year tax losses are $4,000,000. It’s loss relief for that year is? a. $3,000,000 b.…

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1. Which of the following is NOT true? a. NOL carryforwards are indefinitely and carrybacks are not allowed. b. Business meals are deductible. c. NOL carryforwards can deduct up to 80% of taxable income. d. Business entertainment is deductible.