Dwnload Full South Western Federal Taxation 2016 Corporations 39th Edition Hoffman Test Bank PDF
Dwnload Full South Western Federal Taxation 2016 Corporations 39th Edition Hoffman Test Bank PDF
Dwnload Full South Western Federal Taxation 2016 Corporations 39th Edition Hoffman Test Bank PDF
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9th-edition-hoffman-test-bank/
2. Carol and Candace are equal partners in Peach Partnership. In the current year, Peach had a net profit of $75,000
($250,000 gross income – $175,000 operating expenses) and distributed $25,000 to each partner. Peach must pay tax on
$75,000 of income.
a. True
b. False
ANSWER: False
RATIONALE: A partnership is not a taxpaying entity. Its profit (loss) and separate items flow through to the
partners. The partnership’s Form 1065 reports net profit of $75,000. Carol and Candace both
receive a Schedule K-1 reporting net profit of $37,500. Each partner reports net profit of
$37,500 on her own return (Form 1040).
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SCPE.HRMY.15.LO: 2-01 - LO: 2-01
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Reporting
KEYWORDS: Bloom's: Application
OTHER: Time: 2 min.
3. Rajib is the sole shareholder of Robin Corporation, a calendar year S corporation. Robin earned net profit of $350,000
($520,000 gross income – $170,000 operating expenses) and distributed $80,000 to Rajib. Rajib must report Robin
Corporation profit of $350,000 on his Federal income tax return.
a. True
b. False
ANSWER: True
RATIONALE: Similar to partnerships, the net profit or loss of an S corporation flows through to the
shareholders to be reported on their individual tax returns. Robin’s net income of $350,000 is
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4. Donald owns a 45% interest in a partnership that earned $130,000 in the current year. He also owns 45% of the stock in
a C corporation that earned $130,000 during the year. Donald received $20,000 in distributions from each of the two
entities during the year. With respect to this information, Donald must report $78,500 of income on his individual income
tax return for the year.
a. True
b. False
ANSWER: True
RATIONALE: On his individual income tax return for the year, Donald must report his $58,500 ($130,000 ×
45%) share of the partnership income plus the $20,000 of dividends he received from the C
corporation, or $78,500 of total income. Partnership income is taxed to a partner in the year
earned, and distributions do not affect a partner’s share of income. A C corporation’s income
is taxed to a shareholder only when distributed as dividends and to the extent thereof.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SCPE.HRMY.15.LO: 2-01 - LO: 2-01
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Reporting
KEYWORDS: Bloom's: Application
OTHER: Time: 2 min.
5. Quail Corporation is a C corporation with net income of $125,000 during the current year. If Quail paid dividends of
$25,000 to its shareholders, the corporation must pay tax on $100,000 of net income. Shareholders must report the
$25,000 of dividends as income.
a. True
b. False
ANSWER: False
RATIONALE: Quail Corporation must pay tax on the $125,000 of corporate net income. Dividends paid are
not deductible by the corporation. Shareholders must pay tax on the $25,000 of dividends
received from the corporation. This is commonly referred to as double taxation.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SCPE.HRMY.15.LO: 2-01 - LO: 2-01
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Reporting
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a
certain product or service or otherwise on a password-protected website for classroom use.
Chapter 02 - Corporations: Introduction and Operating Rules
KEYWORDS: Bloom's: Application
OTHER: Time: 2 min.
6. Eagle Company, a partnership, had a short-term capital loss of $10,000 during the year. Aaron, who owns 25% of
Eagle, will report $2,500 of Eagle’s short-term capital loss on his individual tax return.
a. True
b. False
ANSWER: True
RATIONALE: Capital losses of a partnership pass through to the partners and are reported on such partners’
tax returns.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SCPE.HRMY.15.LO: 2-01 - LO: 2-01
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Reporting
KEYWORDS: Bloom's: Application
OTHER: Time: 2 min.
7. Don, the sole shareholder of Pastel Corporation (a C corporation), has the corporation pay him a salary of $600,000 in
the current year. The Tax Court has held that $200,000 represents unreasonable compensation. Don must report a salary of
$400,000 and a dividend of $200,000 on his individual tax return.
a. True
b. False
ANSWER: True
RATIONALE: To the extent a salary paid to a shareholder/employee is considered reasonable, the
corporation is allowed a salary deduction, which reduces corporate taxable income. To the
extent a salary payment is not considered reasonable, the payment is treated as a dividend,
which does not reduce corporate taxable income. The shareholder/employee is taxed on both
salary ($400,000) and dividends ($200,000). (Pastel’s taxable income increases by
$200,000, the amount of the unreasonable compensation paid to Don.)
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SCPE.HRMY.15.LO: 2-01 - LO: 2-01
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Measurement -
AICPA: FN-Measurement
KEYWORDS: Bloom's: Comprehension
OTHER: Time: 2 min.
8. Double taxation of corporate income results because dividend distributions are included in a shareholder’s gross income
but are not deductible by the corporation.
a. True
b. False
ANSWER: True
POINTS: 1
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a
certain product or service or otherwise on a password-protected website for classroom use.
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complex of personal attributes ethical and spiritual. In the later
Carthaginian religion, the personal deities are clearly distinguished
from the mere nature-powers, such as the sun, earth, and moon; and
this important distinction may have arisen long before the date of the
document that proves it.107.3
Of the Hittite gods we may say this much at least, that the
monuments enable us to recognise the thunder-god with the
hammer or axe, and in the striking relief at Ibreez we discern the
form of the god of vegetation and crops, holding corn and grapes.
The winged disk, carved with other doubtful fetich-emblems above
the head of the god who is clasping the priest or king on the Boghaz-
Keui relief, is a solar emblem, borrowed probably from Egyptian
religious art. And the Hittite sun-god was invoked in the Hittite treaty
with Rameses II.108.1 Whether the mother-goddess was conceived
as the personal form of Gaia is doubtful; her clear affinity with Kybele
would suggest this, and in the Hittite treaty with Rameses II.
mentioned above, the goddess Tesker is called the Mistress of the
Mountains, the express title of the Phrygian Mother, and another “the
Mistress of the Soil.”108.2 Yet evidently the Hittite religion is too
complex to be regarded as mere nature-worship: the great relief of
Boghaz-Keui shows a solemn and elaborate ritual to which doubtless
some spiritual concepts were attached.
As regards the original ideas underlying the cults of those other
Anatolian peoples who were nearer in geographical position and
perhaps in race to the Aegean peoples, we have no explicit ancient
records that help us to decide for the second millennium. For some
of these various communities the goddess was, as we have seen,
the supreme power. The great Phrygian goddess Kybele is the cult-
figure of most importance for our purpose, and it is possible to divine
her original character with fair certainty.108.3 In her attributes,
functions, and form, we can discern nothing celestial, solar or lunar;
she was, and remained to the end, a mother-goddess of the earth, a
personal source of and life of fruits, beasts, and man: her favourite
haunt was the mountains, and her earliest image that we know, that
which the Greeks called Niobe on Mount Sipylos, seems like a
human shape emerging from the mountain-side: she loved also the
mountain caverns, which were called after her κύβελα; and
according to one legend she emerged from the rock Agdos, and
hence took the name Agdestis. The myth of her beloved Attis is clear
ritual-legend associated with vegetation; and Greek poetry and
Greek cult definitely linked her with the Greek Gaia. We gather also
from the legend of Attis and other facts that her power descended to
the underworld, and the spirits of the dead were gathered to her;109.1
hence the snake appears as her symbol, carved as an akroterion
above her sepulchral shrine, where she is sculptured with her two
lions at Arslan Kaya—“the Lion Rock in Phrygia”;109.2 and her
counterpart, the Lydian Mother Hipta, is addressed as χθονίη.109.3
In all her aspect and functions she is the double of the great
Minoan mother-goddess described already, whose familiar animals
are the lion and the serpent, who claims worship from the mountain-
top, and whose character is wholly that of a great earth goddess with
power doubtless reaching down to the lower world of the dead. Only
from Crete we have evidence which is lacking in pre-Aryan Phrygia
of the presence of a thunder or sky-god by her side.109.4
Turning our attention now to the early Hellenic world, and to that
part of its religion which we may call Nature-worship, we discern
certain general traits that place it on the same plane in some
respects with the Mesopotamian. Certain of the higher deities show
their power in certain elemental spheres, Poseidon mainly in the
water, Demeter in the land, Zeus in the air. But of none of these is
the power wholly limited to that element: and each has acquired, like
the high gods of Assyria and Babylon and Jahwé of Israel, a
complex anthropomorphic character that cannot be derived, though
the old generation of scholars wearily attempted to derive it, from the
elemental nature-phenomenon. Again, other leading divinities, such
as Apollo, Artemis, Athena, are already in the pre-Homeric period, as
far as we can discern, pure real personalities like Nebo and Asshur,
having no discoverable nature-significance at all. Besides these
higher cults, we discern a vast number of popular local cults of
winds, springs, rivers, at first animistically and then
anthropomorphically imagined. So in Mesopotamia we find direct
worship of canals and the river. Finally, we discern in early Hellas a
multitude of special “functional” divinities or heroes, “Sondergötter,”
like Eunostos, the hero of the harvest: and it may be possible to find
their counterparts in the valley of the Euphrates.110.1 We have also
the nameless groups of divine potencies in Hellas, such as the
Πραξιδίκαι, Μειλίχιοι, these being more frequent in the Hellenic than
in the Mesopotamian religion, which presents such parallels as the
Annunaki and the Igigi, nameless daimones of the lower and upper
world: and these in both regions may be regarded as products of
animism not yet developed into theism.
But such general traits of resemblance in two developed
polytheisms deceive no trained inquirer; and it would be childish to
base a theory of borrowing on them. What is far more important are
the marked differences in the nature-side of the Greek polytheism,
as compared with the Sumerian-Babylonian. In the latter, the solar-
element was very strong, though perhaps not so omnipresent as
some Assyriologists assure us. On the contrary, in the proto-Hellenic
system it was strikingly weak, so far as we can interpret the
evidence. The earliest Hellenes certainly regarded the Sun as a
personal animate being, though the word Helios did not necessarily
connote for them an anthropomorphic god. But the insignificance of
his figure in the Homeric poems agrees well with the facts of actual
cult. As I have pointed out in the last volume of my Cults,111.1 it was
only at Rhodes that Helios was a great personal god, appealing to
the faith and affections of the people, revered as their ancestor and
the author of their civilisation, and descending, we may believe, from
the period of the Minoan culture111.2 with which Rhodes was closely
associated in legend. And it appears from the evidence of legend
and Minoan art that sun-worship was of some power in the pre-
Hellenic Aegean civilisation. In the Mycenaean epoch he may have
had power in Corinth, but his cult faded there in the historic age
before that of Athena and Poseidon. The developed Hellene
preferred the more personal deity, whose name did not so obviously
suggest a special phenomenon of nature. And if he inherited or
adopted certain solar personages, as some think he adopted a sun-
god Ares from Thrace, he seems to have transformed them by some
mental process so as to obliterate the traces of the original nature-
perception.
Even more significant for our purpose is the comparison of the two
regions from the point of view of lunar-cult. We have sufficiently
noted already the prominence of the moon-god Sin in the Babylonian
pantheon, an august figure of a great religion: and among all the
Semitic peoples the moon was a male personality, as it appears to
have been for the Vedic Indians and other Aryan peoples. The
Hellenic imagination here presents to us this salient difference, that
the personal moon is feminine, and she seems to have enjoyed the
scantiest cult of all the great powers of Nature. Not that anywhere in
Greece she was wholly without worship.112.1 She is mentioned in a
vague record as one of the divinities to whom νηφάλια, “wineless
offerings,” were consecrated in Athens: she had an ancient place in
the aboriginal religion of Arcadia; of her worship in other places the
records are usually late and insignificant. The great Minoan goddess
may have attracted to herself some lunar significance, but this
aspect of her was not pronounced.
Here, then, is another point at which the theory of early Babylonian
influence in nascent Hellenic religion seriously breaks down. And in
this comparison of Nature-cults it breaks down markedly at two
others. The pantheon of Mesopotamia had early taken on an astral-
character. The primitive Hellenes doubtless had, like other peoples,
their star-myths; and their superstitions were aroused and
superstitious practices evoked by celestial “teratology,” by striking
phenomena, such as eclipses, comets, falling stars.113.1 But there is
no record suggesting that they paid direct worship to the stars, or
that their deities were astral personations, or were in the early period
associated with the stars: such association, where it arose, is merely
a sign of that wave of Oriental influence that moved westward in the
later centuries. The only clear evidences of star-cult in Hellenic
communities that I have been able to find do not disturb this
induction: Lykophron and a late Byzantine author indicate a cult of
Zeus Ἀστέριος in Crete, which cannot, even if real, be interpreted as
direct star-worship:113.2 at Sinope, a city of Assyrian origin, named
after the Babylonian moon-god, a stone with a late inscription
suggests a cult of Seirios and the constellations;113.3 and an Attic
inscription of the Roman Imperial epoch, mentions a priest of the
φωσφόροι, whom we must interpret as stellar beings.113.4 What,
then, must we say about the Dioskouroi, whom we are generally
taught to regard as the personal forms of the morning- and the
evening-star? Certainly, if the astral character of the great Twin-
Brethren of the Hellenes were provedly their original one, the general
statement just put forth would have to be seriously modified. But a
careful study of their cult does not justify the conventional view; and
the theory that Wide has insisted on113.5 appears to me the only
reasonable account of them, namely, that originally they were heroic
“chthonian” figures, to whom a celestial character came later to be
attached: it is significant that the astral aspect of them is only
presented in comparatively late documents and monuments, not in
Homer or the Homeric hymn, and that their most ancient ritual
includes a “lectisternium,” which properly belonged to heroes and
personages of the lower world.
Lastly, the nature-worship of the Hellenes was pre-eminently
concerned with Mother-earth—with Ge-meter, and this divine power
in its varied personal forms was perhaps of all others the nearest
and dearest to the popular heart: so much of their ritual was
concerned directly with her. And some scholars have supposed,
erroneously, I think, but not unnaturally, that all the leading Hellenic
goddesses arose from this aboriginal animistic idea. We may at least
believe this of Demeter and Kore, the most winning personalities of
the higher Hellenic religion. And even Athena and Artemis, whatever,
if any, was their original nature-significance, show in many of their
aspects and much of their ritual a close affinity to the earth-goddess.
But, as I have indicated above, it is impossible to find in the early
Mesopotamian religion a parallel figure to Ge: though Ishtar was
naturally possessed of vegetative functions—so that, when she
disappears below the world, all vegetation languishes—yet it would
be hazardous to say that she was a personal form of earth: we may
rather suspect that by the time the Semites brought her to
Mesopotamia from the West, she had lost all direct nature-
significance, and was wholly a personal individual.
Finally, the cleavage between the two groups of peoples in their
attitude towards the powers of nature is still further marked in the
evolution of certain moral and eschatologic ideas. The concept of a
Ge-Themis, of Earth as the source of righteousness, and of Mother-
earth as the kindly welcomer of the souls of the dead, appears to
have been alien to Mesopotamian imagination, for which, Allatu, the
Queen of the lower world, is a figure wholly terrible.
CHAPTER VII.
The Deities as Social-Powers.