Multiple Choice Questions
1. In general, what is the filing deadline for a C corporation in 2016?
a. March 15
b. April 15
c. The 15th day of the 3rd month after year-end
d. The 15th day of the 4th month after year-end
2. Crimson Corp. was organized as a calendar year corporation in January 2016, incurring $51,000 in qualified organizational expenses, and began business in March 2016. What is the maximum amount Crimson may deduct for organizational expenditures on its 2016 corporate tax return?
a. $4,000
b. $6,611
c. $6,350
d. $7,133
3. Kellye and Becky formed Whoop! Shotz Corporation by contributing property with a fair market value of $50,000 and $70,000 cash, respectively, each for a 50% ownership in the newly formed company. What is Kellye's taxable gain in this situation if the adjusted basis in the property is $25,000 and the company is valued at $120,000?
a. $0
b. $10,000
c. $25,000
d. $35,000
4. Kellye, Becky, and Emily formed Whoop! Shotz Corporation with the following contributions:
Kellye ........................ $50,000 cash
Becky ........................ $50,000 cash
Emily ......................... Legal services
Each was given a one-third ownership in Whoop! Shotz. What amount of income will Emily recognize if the company is valued at $150,000 after formation?
a. $50,000
b. $33,333
c. $0
d. $40,000
5. Kellye and Becky create Whoop! Shotz Corporation by contributing property with a fair market value of $50,000 and cash of $70,000, respectively. Each receives a 50% share in the company, which is valued at $150,000 immediately after the formation. The property has an adjusted basis of $25,000 and is subject to a $10,000 mortgage, which is assumed by the company. What gain will Kellye recognize in this situation?
a. $0
b. $10,000
c. $15,000
d. $25,000