Professional Documents
Culture Documents
Exam
Name___________________________________
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1) A sole proprietor is required to use the same reporting period for both business and individual tax 1)
information.
Answer: True False
3) S corporations must allocate income to shareholders based on their proportionate stock ownership. 3)
Answer: True False
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
6) Which of the following is an advantage of a sole proprietorship over other business forms? 6)
A) low tax rates on dividends
B) tax-exempt treatment of fringe benefits
C) the deduction for compensation paid to the owner
D) ease of formation
Answer: D
8) Demarcus is a 50% partner in the DJ partnership. DJ has taxable income for the year of $200,000. 8)
Demarcus received a $75,000 distribution from the partnership. What amount of income related to
DJ must Demarcus recognize?
A) $100,000 B) $200,000 C) $75,000 D) $37,500
Answer: A
13) Bread Corporation is a C corporation with earnings of $100,000. It paid $20,000 in dividends to its 13)
sole shareholder, Gerald. Gerald also owns 100% of Butter Corporation, an S corporation. Butter
had net taxable income of $80,000 and made a $15,000 distribution to Gerald. What income will
Gerald report from Bread and Butter's activities?
A) $35,000 B) $100,000 C) $95,000 D) $180,000
Answer: B
2
15) Which of the following statements is true? 15)
A) C corporation shareholders are taxed based on their proportionate share of income.
B) Shareholders in a C corporation can use C corporation losses to offset shareholder income
from other sources.
C) Distributions of C corporation income are not taxable.
D) C corporation losses remain in the C corporation and can offset capital gain income from
other years.
Answer: D
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
16) Nathan is single and owns a 54% interest in the new NT Partnership, a calendar-year entity. The NT
Partnership reports $100,000 of profits for its first year. Assuming Nathan is taxed at a 35% marginal tax rate on
the additional income, how much tax does Nathan owe if the NT Partnership does not distribute any of its
profits to him?
Answer: Nathan owes tax on 54% of NT Partnership's profits whether they are distributed or not to him. Thus, he
owes 35% of $54,000, or $18,900.
17) In January of the current year, Rae purchases 100% of Sun Corporation stock for $30,000. Sun Corporation
reports taxable income of $25,000 in the current year, on which it pays tax of $3,750. None of the remaining
$21,250 is distributed to Rae. However, on January 1 of the next year, Rae sells her stock to Lee for $51,250. What
are the tax consequences to Rae of the sale?
Answer: Rae must report a capital gain of $21,250 ($51,250 - $30,000). Thus, Sun Corporation's profit is taxed twice
once at the corporate level and again at the shareholder level when the stock is sold.
18) What are the tax consequences to Whitney who owns 50% of Museum Corporation, a qualifying S corporation
that is a calendar-year entity, if Museum Corporation reports $60,000 of taxable income? How would your
answer change if Museum Corporation reported a $40,000 loss?
Answer: Whitney must pay taxes on $30,000, his 50% share of Museum Corporation's income, whether it is
distributed to him or not. Museum Corporation pays no corporate income taxes. If Museum Corporation
reports a $40,000 loss, Whitney's $20,000 share of the loss reduces his taxable income.
19) The tax disadvantages of the C corporation form of doing business include "double taxation." What is meant by
the term "double taxation" as used in this context?
Answer: Double taxation occurs when corporate earnings are distributed as dividends to the shareholders. Since
the corporate earnings have already been taxed at the corporate level, the shareholders must pay
personal income tax as a second tax when the earnings are distributed as dividends. Double taxation can
also occur when the stock is sold or exchanged and the portion of the gain attributable to the accumulated
earnings is taxed as capital gain.
3
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III
DR. FISK’S BILL
In
memory of
DR. JOSEPH FISK,
Surgeon in the
Revolutionary Army and
member of the Mass.
Cincinnati Society,
who died Sept. 25, 1837,
Aged 84 Years.
THE DEAD OF PATRIOTS’ DAY[23]
APRIL 19, 1775[24]
NAME AGE WHERE KILLED TOWN WHERE
FROM BURIED
Ensign Robert 63 Lexington Common Lexington Lexington Common
Munroe
Jonas Parker 53 „„ „ „„
Jonathan 30 „„ „ „„
Harrington
Isaac Muzzy 31 Near Lexington „ „„
Common
Samuel Hadley 29 „„„ „ „„
John Brown 25 „„„ „ „„
Asahel Porter „„„ Woburn Woburn
Capt. Isaac Davis 30 Concord Bridge Acton Acton Centre
Abner Hosmer 21 „„ „ „„
Capt. Jonathan 41 N’r Brooks’ Tav’n, Bedford Bedford
Wilson Lincoln
Daniel Thompson 40 „„„„ Woburn Woburn
Nathaniel Wyman 25 „„„„ Lexington Old Cemetery,
Lexington
Asahel Reed 22 „ Hartwell’s „ „ Sudbury Sudbury Centre
James Hayward 25 Fiske’s Hill, Acton Acton Centre
Lexington
Josiah Haynes 80 Concord Hill Sudbury Sudbury Centre
Jedediah Munroe 54 Lexington Lexington Old Cemetery,
Lexington
John Raymond 44 N’r Munroe’s Tav’n, „ „„„
Lex.
Joseph Coolidge 45 East Lexington Watert’wn East Watertown
Henry Jacobs 22 Menotomy Danvers Danvers
Samuel Cook 33 „ „ „
Ebenezer 22 „ „ „
Goldthwait
George Southwick 25 „ „ „
Benjamin Daland 25 „ „ „
Jotham Webb 22 „ „ „
Perley Putnam 21 „ „ „
Daniel Townsend 37 „ Lynn Lynnfield
Reuben Kennison „ Beverly Danvers, Ryal Side
William Flint „ Lynn Menotomy, now
Arl’gton
Thomas Hadley „ „ „„„
Jason Russell 59 „ Menotomy „„„
William Polly 30 Mill Pond, Op. Medford Medford
Menotomy
Henry Putnam 70 Menotomy „ „
Benjamin Peirce 37 „ Salem Menotomy
Lieut. John Bacon 54 „ Needham „
Sergt. Elisha Mills 40 „ „ Needham
Amos Mills 43 „ „ Menotomy
Natheniel 57 „ „ „
Chamberlain
Jonathan Parker 28 „ Dedham „
Elias Haven „ Dover „
Abednego 25 „ Lynn „
Ramsdell
Jabez Wyman 39 „ Menotomy „
Jason Winship 45 „ „ „
Moses Richardson 53 Cambridge Camb’dge Cambridge
John Hicks 50 „ „ „
William Marcy „ „ „
Isaac Gardner 49 „ Brooklyn Brooklyn
James Miller 65 Charlestown Cha’stown Charlestown
Edward Barber 14 Charlestown Neck „ „
THE MEMORIAL TREES AT WASHINGTON
BATH, —— 1780.
DEAR SIR,
Dear Sir,
Your most obed’t Serv’t
BENJAMIN HAWKINS.
LETTER FROM SILAS DEANE TO CAPT. JOSEPH
HYNSON.
[This letter, which was sold at auction in New York in May, came to light very
opportunely for our article. Its existence was before unknown.—See article “Between
Two Flags,” p. 203]
CAPT. HYNSON—
SIR:
I wrote you on the 4th., the 15th., the 17th., & the 21st.,—on
the 17th I sent a copy of my letter of the 4th. I now have before me
yours of the 24th., by which it does not appear that you have
received any of my Letters, this & the pretended Secrecy with
which everything is conducted convinces me of what I have been
long since suspicious, (viz) that you are in the hands of a very
dishonest man—I once more enclose the copy of my letter of the
4th and again insist, that before you leave Havre, you see that
every Bill is just, and that every thing has been conducted as it
ought to be, for I freely own to you, I have lost all confidence in
Eyries (?) You will then ask me why I have dealt with him at all for
this Vessel. I answer at once, to get my Money out of his hands,
but if he witholds anything from your knowledge quit him
immediately. I have wrote directly to Eyries by this post, & am
with due respect,
Mad Anthony was not content with his success at Stony Point,
but a short time after issued this order:
Fishkill Landing, 4 Aug., 1779.
Dear Sir: You’ll please to order a detachment of one hundred and fifty men, with
two days’ provisions, under the command of Col. Butler. I wish you to order Major Hull
with him.
Interim believe me yours,
ANT’Y WAYNE. B. G.
J. HARVEY COOK.
Fishkill-on-Hudson.
THE LAST VETERAN GONE
Hiram Cronk, the last survivor of the War of 1812, died at the
age of 105, at his home in Oneida County, N. Y., May 15, and was
given a public military funeral in New York City, May 18—the
Society of the War of 1812 forming a part of the escort. The body
lay in state over night at the City Hall—an honor never before
shown to a private soldier—and on May 19 was interred in Cypress
Hills Cemetery, Long Island.
QUERY
[A limited number of queries will be inserted for subscribers free; to all others a
charge of one cent per word (payable in stamps) will be made.]
16. a. BARTLETT—What was the maiden name of Abigail,
wife of Richard Bartlett of Newbury? She died 1687.
W. 1.
ENGLISH PEDIGREE OF THE FIRST GABRIEL
LUDLOW, OF NEW YORK