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Full Download Corporate Partnership Estate and Gift Taxation 2013 7th Edition Pratt Test Bank
Full Download Corporate Partnership Estate and Gift Taxation 2013 7th Edition Pratt Test Bank
Full Download Corporate Partnership Estate and Gift Taxation 2013 7th Edition Pratt Test Bank
https://testbankfan.com/download/corporate-partnership-estate-and-gift-taxation-2013
-7th-edition-pratt-test-bank/
1-35 Linda is correct in her assessment that the regular corporate form will not be a
suitable vehicle for holding her investment property. This option is not viable
because losses will remain within the corporation for possible future use against
corporate income. Because she can qualify for the $25,000 exception to the
passive activity loss rules for actively managed rental realty, she will want the
losses passed through to her for use on her individual return.
Linda's third option is interesting and, according to the Supreme Court case of
Bollinger, viable. If the corporation can be formed as a regular corporation and be
treated for Federal income purposes as Linda's agent, all losses will pass through
to her and may be used against her total basis in the investment of $240,000. Her
basis in her investment includes the nonrecourse note because the investment in
realty was acquired with a nonrecourse loan from a qualified lender [see § 465
(b)(6)].
If Linda follows the Supreme Court guidelines, it is very likely she will obtain
her objectives. What specifically can she do? The Bollinger case provides a model
of specific steps to take to establish an agency relationship. Bollinger formed an
agency relationship with his corporation and stipulated that the corporation was
formed solely to obtain financing, that the corporation was not liable for
maintenance of the property or for repayment of any promissory notes, and that
Bollinger would indemnify and hold the corporation harmless from any liability it
might sustain as his agent.
Test Bank
True or False
________ 1. The proprietorship uses gross ordinary income as the basis for
calculating any self-employment tax due.
________ 3. In transactions between the partners and the partnership, the parties are
generally treated like unrelated parties.
________ 6. If an individual taxpayer creates a legal corporation under state law, the
government (i.e., the IRS) cannot disregard the entity and tax the
individual taxpayer on the income.
________ 8. All bad debts of a corporation are treated as business rather than
nonbusiness bad debts.
________ 13. Because organizational costs are assets with indefinite lives (i.e., they
have value for the life of the corporation), they may not be expensed or
amortized.
________ 18. In planning for its annual charitable contributions, a corporation should
take into account any net operating loss or capital loss carryforwards
since such items reduce the corporation's taxable income base for
purposes of the annual deduction limitation.
________ 19. Unlike individuals, corporations with excess capital losses in the current
year are allowed to carry these losses back five years and forward three
years to offset capital gains in the carryback or carryforward years.
________ 21. An accrual basis corporation must use the cash method in claiming
deductions for amounts paid to its cash basis sole shareholder.
________ 22. The 2012 Federal income tax rate for a calendar year corporation with
taxable income of $335,000 up to $10 million is 34 percent.
By Jakob Bjerkens
THE WEATHER
This part does not contain any scientific accounts of the
meteorological observations undertaken by the expedition in King’s
Bay, during the flight or during the twenty-four days’ stay in 87° 43′—
this will be left for the scientific journals to publish. I shall only give
here a characterization of the “polar-weather” as it was during 1925
and what was done in order to determine the best date for the start.
What kind of weather conditions must the flyers have for their
journey towards the Pole?
First of all there must be no fog at the place where they have to
land. Even if there is only a fog-belt extending a few meters above the
ground, a landing is impossible and a “forced-landing” would almost
certainly end in a catastrophe.
Further, the flyers must avoid passing through thick snow. The two
flying-machines might easily lose sight of each other, and if, in order to
keep in contact with each other, they should fly close together, there is
always the danger of a collision.
An overcast sky without rainfall is also useless. At least it must
clear now and again sufficiently to make it possible to navigate by the
sun. It is of course known that steering by the magnetic compass is
very uncertain so far north, as the extent of the deviations in the Arctic
is not sufficiently known.
Luckily so much is known about the weather in the polar ice region
that it is possible to choose in advance the most suitable time of year
for a polar flight. First of all, Nansen’s expedition by the “Fram” in
1893–1896 has given us this knowledge about the polar weather.
During almost the entire time of their drift across the Arctic
observations were made nearly every two hours in the course of the
day, so that a singularly rich stock of information exists. The
observations have been thoroughly gone through by the late Professor
H. Mohn, so that we have got them set out now in a most perspicuous
form. Both the observers’ and Professor Mohn’s calculations are
published in the work, “The Norwegian North Polar Expedition XVII
Meteorology.”
In January 14
„ February 12
„ March 9
„ April 8
„ May 7
„ June 0
„ July 0
„ August 0
„ September 0
„ October 4
„ November 11
„ December 15
In January 11
„ February 11
„ March 13
„ April 13
„ May 20
„ June 20
„ July 21
„ August 19
„ September 22
„ October 14
„ November 9
„ December 9
Therefore one can count that two-thirds of all the days from May to
September have rain or snow-falls. In the winter time, on the other
hand, only one-third of the days have downpours.
Fog—the flyer’s worst enemy—also collects during the summer
half of the year. Foggy days on an average were:
In January 0
„ February 0
„ March 2
„ April 1
„ May 2
„ June 10
„ July 20
„ August 16
„ September 10
„ October 4
„ November 1
„ December 0
One is therefore pretty sure to be without fog until May, but from
June to September it is general. First, in October the fog begins to get
less and then disappears altogether in the middle of winter.
It appears quite clearly from the “Fram” observations that only the
dark period of the year has somewhat stable weather conditions, with
a clear sky. During the light period of the year the weather is gray and
thick.
These conditions are as unfavorable as possible for all flying
expeditions towards the Pole. The good weather during the winter—
October to March—cannot be taken advantage of on account of the
darkness, and it is necessary to be satisfied with the much more
unfavorable weather during the lighter period of the year.
Luckily there is, however, an intermediate condition of weather,
when the light is still there, but the summer’s gray weather has not yet
set in properly. April with its eight clear weather days, seventeen days
without downpours, and only one foggy day ought to offer the best
conditions for flying. Only one has to remember that when flying over a
longer distance the chances of getting into ugly weather are much
greater than one would imagine from the impression given by the
figures. In a distance of an extent equaling that from Spitzbergen to the
Pole, during a good month such as April, one will in most cases have
to pass through a bad and good weather-zone. In April, too, one has to
reckon with severe cold. “Fram” had a temperature as low as -38° 4 c.
in the month of April and even at the end of that month it can go down
to -29° c. If it is, therefore, one’s intention to fly on a day of good
weather, it is necessary to be well protected against the severe cold.
In 1925 the polar flight could not be undertaken as early as April.
Notwithstanding the fact that the journey from Norway was undertaken
before the real opening of the shipping season, and that the
preparations in King’s Bay proceeded quickly and according to
program, our machines were not ready to start until the beginning of
May. An earlier start might well have been possible if the previous
winter had been spent in Spitzbergen.
It was the business of the meteorologists to determine which was
the best day in the month of May for the start. With “Fram’s”
experiences before us the prospects of finding a good starting day
were not very rosy. In May, 1896, when “Fram” was about halfway
between Spitzbergen and the Pole, there were twenty-five days with
rainfall, and only three days at the beginning of the month had clear
weather. Should May, 1925, turn out just as bad as May, 1896, the
polar flight would take place under very risky meteorological
conditions.
What resources were now at our disposal to determine what kind
of weather was expected? First were the telegrams from the stations in
the neighborhood, indicating the kind of weather which was
approaching. This system is commonly used by all meteorological
institutions which have something to do with weather reports, and it
was therefore only natural that this should be made use of for the polar
flight. One can, however, know beforehand that to make weather
forecasts at Spitzbergen is much more difficult than at other places
where it has been tried before. For instance, Southern Europe is
covered by a network of telegraph stations which can report the
approaching weather. But in Spitzbergen it is not so easy. The network
of European stations certainly give reports of every condition
approaching from the south, but no telegraphic weather reports can be
obtained from the west, north, or east. There are, therefore, many
situations where the meteorologists, notwithstanding all the aid, can
give no reply to the question: “What will the weather be like to-
morrow?”
And that is the case in Spitzbergen. But the polar flight had to be
undertaken from there, and had to extend more than 1,000 kilometers
above unknown regions in unknown weather conditions! How could
any one guarantee good weather for the whole distance?
I know that many meteorologists would reply to such a question
that this is beyond science. To prophesy what the weather will be like
near the Pole is pure guesswork. As now and again stress has been
put upon this view in the press, may I be permitted to defend the
foolhardiness I showed by venturing to tackle this problem? I admit
that it is very often quite impossible to say what the weather will be like
on the way from Spitzbergen to the Pole, and still less possible to
predict how it is likely to turn out in a day or two’s time. But
meteorology allows us to determine by indirect conclusions whether
the prospects of good weather are bright or whether the situation is too
risky. That these weather forecasts are based on very weak
foundations, and therefore can easily turn out wrong, was known by
the airmen from the first hour. Still they preferred to follow the advice
science could give, even if it was often vaguely formulated and given
with all sorts of provisos.
The plan was not to risk a flight in any case through fog and thick
snow, where the aeroplanes would certainly lose sight of each other,
but to turn back if the weather should begin to look too threatening. It
would then be the meteorologists’ problem to find another occasion
when it would be again worth while to try and see whether in a
renewed attempt the way to the Pole would be clear.
For several years the exchange of meteorological weather reports
had been broadcast by wireless so that everybody who had a receiving
apparatus could make free use of the same. “Fram’s” receiving
apparatus was of the latest type and worked very well, even receiving
meteorological messages from countries very far distant. Mr. Devoid
attended to the receiving of nearly all the weather reports—a job he
was well acquainted with, through his position as assistant at the
Geophysical Institute at Tromsö. It can safely be said that we could not
have got a better man for the handling of all the radio weather news
which came to hand. He was untiring in trying to pick up and read
communications which were very weak, coming from far distant
stations, and it was, thanks to him, that the weather forecasting station
at King’s Bay was able to work with nearly the same full range of
meteorological observations as any southern weather forecasting
station.
The meteorological despatches are broadcast by international
agreement and, with one single apparatus, one can receive accounts
of observations from the whole of Europe, North America and North
Asia. That has been made possible by the various countries all having
come to an agreement, in which they have arranged to send
despatches following each other closely according to a prearranged
time-table. On the “Fram” we regularly received the following
despatches:
p.m.
2:12Tromsö (+ polar station Jan Mayen, Björnöya)
2:20Königswusterhausen (Germany)
2:35Lyngby (Denmark)
2:40Karlsborg (Sweden)
2:50Oslo (Norway)
3:00London (England and Faroe Islands)
3:15Grudziadz (Poland)
3:20Paris (France, Switzerland, Belgium, Holland)
3:30Sandhamn (Finland)
3:50London (collected messages)
4:00Tromsö (collected messages)
5:00Paris (collected messages)
5:45Oslo (Norwegian observations 5 o’clock)
5:50London (English observations 5 o’clock)
6:30Stavanger (repetition of Annapolis, U.S.A.)
p.m.
7:12Tromsö (+ polar station Jan Mayen, Björnöya)
7:20Königswusterhausen (Germany)
7:35Lyngby (Denmark)
7:40Karlsborg (Sweden)
7:50Oslo (Norway)
8:00London (England and Faroe Islands)
8:15Grudziadz (Poland)
8:20Paris (France, Switzerland, Belgium, Holland)
8:30Sandhamn (Finland)
8:40London (ships’ observations)
8:50Tromsö (collected messages)
9:15Haapsalu (Estland)
10:00Paris (collected messages)
THE COURSE OF THE SHIPS ON WATCH, “FRAM” AND “HOBBY,” DURING THE
COURSE OF THE EXPEDITION
The dotted area indicates the pack ice.
Furthermore, in the English, French and Norwegian despatches
there were a certain number of observations from ships in the Atlantic,
which in themselves formed a bridge between the American and
European stations. The whole station system therefore formed an
almost complete circle round the polar regions, with the exception of
Northeast Siberia, where telegraphic communications are still bad, and
this of course makes a wide gap.