Indicate whether the statement is true or false.

$1.$ The calendar year Sterling Group files its Federal corporate income tax return on a consolidated basis. The group's Form $1120$ is due on April $15,$ or October $15$ if the group files an extension request with the IRS.

a$.$ True

b$.$ False

$2.$ Albatross, a C corporation, had $$140,000$ net income from operations and a $$25,000$ short$-$term capital loss in the current year. Albatross Corporation's taxable income is $$140,000.$

a$.$ True

b$.$ False

$3.$ Hornbill Corporation, a cash basis and calendar year C corporation, was formed

and began operations on May $1,2023.$ Hornbill incurred the following expenses during its first year of operations $($May $1-$ December $31,2023)$: temporary directors meeting expenses of $$10,500,$ state of incorporation fee of $$5,000,$ stock certificate printing expenses of $$1,200,$ and legal fees for drafting corporate charter and bylaws of $$7,500.$ Wanting to deduct as much as possible in the current year, Hornbill Corporation's $2023$ deduction for organizational expenditures is $$5,800.$ a$.$ True

b$.$ False

$4.$ A shareholder's holding period for stock received under $351$ can include the holding period of the property transferred to the corporation.

a$.$ True

b$.$ False

$5.$ As a general rule, C corporations must use the accrual method of accounting. However, under several exceptions to this rule $($e$.$g$.,$ average annual gross receipts of $$29,000,000$ or less for the most recent $3-$year period$),$ a C corporation can use the cash method.

a$.$ True

b$.$ False

$6.$ The passive activity loss rules apply to closely held C corporations and to personal service corporations but not to S corporations.

a$.$ True

b$.$ False

$7.$ If a transaction qualifies under $351,$ any recognized gain is equal to the value of the boot received.

a$.$ True

b$.$ False

$8.$ Alan, an Owl Corporation shareholder, makes a contribution to capital of equipment to Owl, basis of $$40,000$ and fair market value of $$50,000.$ Owl's basis of the equipment that Alan contributes is equal to $$50,000,$ the property's fair market value.

a$.$ True

b$.$ False