FCCA FCCA Taxation and Compliance

Question 1

In the United States, which federal tax form does a C-corporation use to file its annual income tax return?

Accepted Answer

Form 1120

Answer

Form 1040

Answer

Form 1065

Answer

Form 1041

Question 2

What is the current federal corporate income tax rate in the United States as established by the Tax Cuts and Jobs Act (TCJA) of 2017?

Accepted Answer

21%

Answer

25%

Answer

28%

Answer

35%

Question 3

Which US concept allows businesses to carry forward net operating losses (NOLs) to offset future taxable income under TCJA rules?

Accepted Answer

NOLs can be carried forward indefinitely but are limited to 80% of taxable income

Answer

NOLs can only be carried back 2 years

Answer

NOLs can be carried forward for up to 20 years only

Answer

NOLs are no longer allowed under TCJA

Question 4

For US federal tax purposes, what is the tax treatment of dividends received by a US C-corporation from another domestic corporation in which it owns 20-79% of voting stock?

Accepted Answer

65% deductible via the dividends received deduction (DRD)

Answer

100% included in taxable income

Answer

50% deductible via the dividends received deduction (DRD)

Answer

100% excluded from taxable income

Question 5

Under US tax law, what is the primary purpose of transfer pricing rules for multinational corporations?

Accepted Answer

To ensure transactions between related parties are priced at arm's length to prevent profit shifting

Answer

To set prices for retail sales to consumers

Answer

To regulate commodity prices in international trade

Answer

To determine import duties and tariffs on goods

Question 6

In US taxation, what does 'basis' refer to in the context of capital gains calculations?

Accepted Answer

The original cost of an asset, adjusted for improvements and depreciation

Answer

The market value of an asset at the time of sale

Answer

The tax rate applied to capital gains income

Answer

The minimum price at which an asset can be sold