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During the current year, Flamingo Corporation, a calendar year C corporation, had operating income of $415,000, operating expenses of $245,000, a short-term capital loss of $15,000, and a long-term capital gain of $30,000. How much is Flamingos taxable income for the year?

Question 26 options:

	$160,000
	$170,000
	$135,000
	$185,000

Question 27 (1 point)

Jane and Walt form Yellow Corporation, a C Corporation. Jane transfers both equipment worth $950,000 (basis of $200,000) and cash of $50,000 to Yellow Corporation for 50% of its stock. Walt transfers a building and land worth $1,050,000 (basis of $400,000) and in return gets 50% of Yellows stock and $50,000 in cash.

Question 27 options:

	Jane recognizes no gain Walt recognizes gain of $50,000.
	Neither Jane nor Walt recognizes gain.
	Jane recognizes a loss of $50,000 Walt has no gain.
	Jane recognizes a gain of $750,000 Walt recognizes gain of $650,000

Question 28 (1 point)

Zebra, a C Corporation, distributes $40,000 to its sole shareholder, Alicia. At the time of the distribution, Zebras total E&P is $28,000 and Alicia's basis in her stock is $10,000. Alicia's gain from this transaction is a

Question 28 options:

	$2,000 capital gain.
	$40,000 capital gain.
	$12,000 capital gain.
	$30,000 capital gain.

Question 29 (1 point)

At the time of her death, Megan was involved in the following.

Owned an insurance policy on the life of her father with a current cash surrender value of $250,000 and a maturity value of $800,000 when her father dies.

Was an equal tenant in common with her brother in a tract of land worth $800,000. Megan and her brother each paid $100,000 to acquire the land (total purchase price $200,000)

Was a joint tenant with her two sisters in stock worth $1,500,000. Each sister contributed equally to the purchase of the shares (total $300,000).

As to these transactions, Megans gross estate must include:

Question 29 options:

	$1,150,000.
	$3,100,000.
	$1,700,000
	$1,000,000.

Question 30 (1 point)

Which statement is incorrect as to the conduct of IRS income tax audits?

Question 30 options:

	There are three types of audits: correspondence, office, and field.
	A correspondence audit requires the taxpayer to mail their supporting documents directly to the IRS.
	Field audits require that the taxpayer or his/her representative come to the IRS office.
	An office audit usually is concluded after a meeting with the taxpayer at the IRS auditors office.

Question 31 (1 point)

Abigail transferred land worth $240,000, with a tax basis of $100,000, to Red Corporation, an existing C Corporation, for 100 shares of its stock. Red Corporation has two other shareholders, Tom and Jerry, each of whom holds 100 shares they acquired many years ago. With respect to the transfer:

Question 31 options:

	Abigail has no recognized gain.
	Abigail has a basis of $100,000 in her 100 shares in Red Corporation.
	Abigail has a basis of $240,000 in her 100 shares in Red Corporation.
	Red Corporation has a basis of $100,000 in the land.

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