February 2018 LACBA MCLE Test and Answer Sheet

 

Test No. 275: Start-Up Opportunities

To access the article related to this test, please click here. The article will open in a separate window.
  
Instructions for Obtaining MCLE Credit

The Los Angeles County Bar Association certifies that this activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour. To apply for credit, please follow the instructions.

1. Study the CLE article.

2. Answer the test questions by marking the appropriate boxes. Each question has only one answer.

3. Photocopies of this answer sheet may be submitted; however, this form should not be enlarged or reduced. Mail the answer sheet and the $20 testing fee ($25 for non-LACBA members) to:

Los Angeles Lawyer
MCLE Test
P.O. Box 55020
Los Angeles, CA 90055

Make checks payable to Los Angeles Lawyer.

4. You can also fill in the test form and submit it directly to LACBA by clicking "Submit." To submit your test answers online you will need to pay by credit card. After submitting your answers you will be presented with a screen requesting payment information. This information will be submitted in a secure mode which will allow you to safely transmit your credit card number over the Internet. If you prefer not to pay by credit card, please print this answer sheet and submit your responses by regular mail.

5. Within six weeks, Los Angeles Lawyer will return your test with the correct answers, a rationale for the correct answers, and a certificate verifying the CLE credit you earned through this self-study activity.

6. For future reference, please retain the CLE test materials returned to you.


 

Test Sheet
 



  
Mark your answers to the test by clicking next to your choice.  All questions must be answered.  Each question has only one answer. This test is worth 1 hour of credit.*

1. Qualified Small Business Stock (QSBS) is always excluded from tax, regardless of circumstances.


2. To qualify as QSBS, a corporation must be a C corporation; an S corporation or other flow-through entity does not qualify.


3. Under Internal Revenue Code Section 1202, service businesses (e.g., law and accounting) are included in the definition of eligible businesses under QSBS requirements.


4. Shares of a corporation qualify as QSBS after the company is sold to another company if the acquirer used its own stock in exchange for the stock of the target company.


5. The Internal Revenue Service has limited the use of estate-freezing techniques for estate planning purposes.


6. The application of dual classes of stock is a new phenomenon that started with “hot” online companies such as Facebook.


7. Only C corporations may have dual classes of stock.


8. Stock in the same class may have different voting, but not preference, rights in the capital structure.


9. The use of dual classes of stock may allow management to retain voting control over a corporation while still raising outside funds.


10. Investors view dual classes of stock favorably, preferring that management retain voting control of the company while allowing inside investors to benefit from upside potential.


11. Qualifying research and experimentation expenditures have been reduced under the new Tax Cuts and Jobs Act.


12. Research and experimentation expenditures may include expenditures for activities that further develop and expand upon an existing, legacy product and that are already certain to work.


13. Research and experimentation expenditures may include attorney’s fees and costs incurred in obtaining a patent.


14. Internal Revenue Code Section 41, concerning research tax credits, was repealed in the Tax Cuts and Jobs Act.


15. Research tax credits are allowable when they include in-house research expenses of a start-up if the principal purpose of the expenditure is to use the results of the research in the active conduct of future trade or business.


16. Qualified research includes nontechnological aspects of a product, e.g., market research and advertising.


17. Net operating losses can still be carried back under the Tax Cuts and Jobs Act.


18. The Tax Cuts and Jobs Act allows for 100 percent expensing of certain business assets acquired after September 27, 2017.


19. Under The Tax Cuts and Jobs Act, the time for capitalization and amortization for research conducted outside the United States will be 10 years.


20. The new corporate tax rate is 21 percent under the Tax Cuts and Jobs Act, which encompasses only C corporations and not S corporations.

 


Before clicking the Submit button, please verify that all questions have been answered. An error message will appear if not all questions are answered.

* The Los Angeles County Bar Association has been approved as a continuing legal education provider of Minimum Continuing Legal Education credit by the State Bar of California. This self-assessment activity will qualify for Minimum Continuing Legal Education credit by the State Bar of California in the amount of one hour.