P2-U12 · PART 2 · SOURCE CYCLE 2026-2027
C Corporation Overview
How to complete this unit
This unit uses 23 source-gated recall cards and 23 admissible practice questions. Complete the sequence in order; the unreleased wiki prose remains outside the learner path.
- 1 · LearnBuild the rule
Answer each recall prompt before opening it. Then learn the exact rule, test the controlling facts through four quick challenges, explore common questions, and finish with one own-words teach-back.
- 2 · ApplyUse it in context
Complete at least 20 mapped questions over two sessions. Review the explanation even when the answer is correct.
- 3 · ProveTest readiness
Use the Part 2 mock under time pressure. Return here for every flagged or missed concept before the next attempt.
Verified recall questions
Only cards whose complete question and answer were checked against exact primary-authority evidence appear here. Stable unit ownership gathers this lesson across 1 textbook collection.
Q1.Alder Corporation files late with unpaid tax. What is the general late-filing rate and maximum?
5% per month or part, up to 25%
Q2.Alder Corporation expects $700 of estimated tax for the year. What is generally required?
Make installment payments of estimated tax
Q3.At what rate does Alder Corporation generally figure its federal income tax?
21% of taxable income
Q4.Which form does a corporation generally use to determine applicable-corporation status and calculate CAMT?
Form 4626
Q5.To what should Schedule L shareholder loans generally reconcile for an S corporation?
The sum of the shareholder-loan amounts on Schedules K-1
Q6.Which book-tax reconciliation schedule must an S corporation with at least $10 million of total assets at year-end file instead of Schedule M-1?
Schedule M-3 (Form 1120-S)
Q7.What makes a loan to or from an owner a below-market loan for the cited corporate rule?
No interest or interest below the applicable federal rate
Q8.A corporation must make estimated tax payments if it expects its tax due to be _____ or more during the taxable year.
500
Q9.If an individual taxpayer transfers money or property to a corporation in exchange for stock in that corporation, and immediately afterward the person is in control of the corporation, the exchange is usually ____________.
Not taxable.
Q10.A C corporation generally must make estimated payments throughout the year. For a calendar-year corporation, when are estimated tax payments normally due?
April 15, June 15, September 15, and December 15.
Q11.Hartford Bioresources, Inc. is a cash-basis, fiscal-year C corporation. Its tax year ends June 30. When are the installment payments for Hartford Bioresources’ estimated tax payments due?
Installment payments are due on October 15, December 15, March 15, and June 15.
Q12.Every business entity must figure taxable income for an annual accounting period called a: __________.
Tax year.
Q13.Hillside Associates is a C corporation. At the end of the year, Hillside Associates, Inc. had $1 million in gross receipts and $6 million in assets. Which of these schedules is the corporation required to file?
Schedule L and Schedule M-1.
Q14.Shrill Media, Inc. has net "book income" of $3 million in calendar year 2025. What is its net taxable income if it also has the following activity? Federal income tax expense: ($1,500,000) Business meals: ($200,000) Tax-exempt interest income: $100,000 Capital losses from the sale of stock: ($47,000) Capital gains from the sale of cryptocurrency: $18,000
$4,529,000
Q15.The accumulated earnings tax is levied at a rate of ____ on accumulated taxable income.
20%
Q16.Lorraine and Marcus, a married couple, each transfer machinery with a basis of $10,000 to a corporation in exchange for stock with a fair market value of $30,000. The total stock received by them represents 75% of the corporation's stock. The other 25% of the corporation's stock is owned by Annie, an unrelated person. The taxable consequences are:
Lorraine and Marcus each must recognize a gain of $20,000.
Q17.Hilltop Honey, Inc. is a small C corporation that produces organic honey and beeswax candles. In 2025, Hilltop Honey had $245,000 in gross receipts from the sale of their products. The company's total assets at the end of the year were $95,000. Which of these schedules is the Hilltop Honey required to file?
None of these schedules.
Q18.Seymour, a licensed CPA, transfers computer equipment worth $43,000 and renders accounting services valued at $6,000 to Cramer Industries, Inc. in exchange for stock valued at $49,000. Right after the exchange, Seymour owns 81% of the outstanding corporate stock. How much income, if any, must Seymour recognize in this transaction?
$6,000
Q19.Osvaldo transfers real estate with a basis of $40,000 and an FMV of $90,000 to the Steele Corporation in return for 80% of the stock in the corporation. Just before the transfer, Osvaldo obtains a $10,000 equity loan secured by the real estate and uses all the loan proceeds to buy a new motorcycle for himself. Along with the real estate, the equity loan is transferred to the Steele Corporation. What are the tax consequences of this action to the shareholder, Osvaldo?
Osvaldo has to report a $10,000 gain on the transfer.
Q20.Which of these domestic business entities will not be automatically taxed as a corporation?
A single-member limited liability company (LLC) owned by an individual.
Q21.Coldspring Aviation, Inc. operates on a fiscal year that ends June 30, 2025. Not counting extensions, what is the normal due date for its corporate tax return (Form 1120)?
September 15
Q22.Which of the following forms can a corporation use to apply for a refund of overpaid tax?
Form 1139
Q23.To be eligible for section 351 nonrecognition treatment, immediately after the exchange, a taxpayer must own at least ____ of the total combined voting power of all classes of stock entitled to vote and at least ____ of the outstanding shares of each class of nonvoting stock.
80% and 80%
Ready to move on?
- ▸ Explain at least 80% of these 23 rules without opening the answer, twice on different days.
- ▸ Score 80% across 20 or more mapped questions over two sessions, not one memorized round.
- ▸ Complete a timed Part 2 mock and return to this unit if its concepts remain flagged or missed.
Use these checks to choose your next study action. They do not predict a PSI scaled score.