CCA Taxation & Regulatory Compliance 5

Question 1

Under IRC Section 199A, which type of entity is eligible to claim the Qualified Business Income (QBI) deduction?

Accepted Answer

S corporations, partnerships, and sole proprietors

Answer

The Section 199A QBI deduction is available to non-corporate taxpayers — including S corporation shareholders, partnership partners, and sole proprietors — allowing up to a 20% deduction on qualified business income.

Question 2

The Uniform Capitalization (UNICAP) rules under IRC Section 263A require which of the following?

Accepted Answer

Capitalization of direct and indirect costs into inventory or self-constructed assets

Answer

Section 263A requires producers and resellers to capitalize direct costs and an allocable share of indirect costs into inventory or self-constructed property rather than deducting them immediately.

Question 3

What is the statute of limitations for the IRS to assess additional tax in the case of a substantial omission of gross income (more than 25% omitted)?

Accepted Answer

6 years

Answer

When a taxpayer omits more than 25% of gross income from a return, the IRS has 6 years (rather than the standard 3 years) from the return filing date to assess additional tax.

Question 4

Which anti-avoidance provision under IRC Section 269 allows the IRS to disallow deductions or credits when a corporation is acquired principally to evade tax?

Accepted Answer

The Section 269 acquisition-for-tax-avoidance rule

Answer

Section 269 authorizes the IRS to disallow deductions, credits, or other allowances when a corporation is acquired and a principal purpose of the acquisition was to evade or avoid federal income tax.

Question 5

Under the Bank Secrecy Act (BSA), a corporation that has financial interest in or signature authority over foreign financial accounts must file an FBAR when the aggregate value exceeds:

Accepted Answer

$10,000 at any time during the year

Answer

FinCEN Form 114 (FBAR) must be filed when the aggregate value of foreign financial accounts exceeds $10,000 at any point during the calendar year.

(CCA) Certified Corporate Accountant Practice Test

(CCA) Certified Corporate Accountant Practice Test

CCA Taxation & Regulatory Compliance 5