Alpha Corporation Owns 100 Percent of Beta Company, and Beta

question 73

Multiple Choice

Alpha Corporation owns 100 percent of Beta Company, and Beta owns 80 percent of Gamma, Inc., all of which are domestic corporations. Information for the three companies for the year ending December 31, 2011 follows:
-What is Gamma's accrual-based income for 2011?

• A) $76,000.
• B) $80,000.
• C) $96,000.
• D) $100,000.
• E) $104,000.

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Definitions:

Joint Tenant

A co-owner of a property where each tenant has an equal share and rights, with the stipulation that upon the death of one tenant, their share automatically transfers to the surviving joint tenant(s).

Fee Simple Absolute

The most complete form of ownership of real property, which includes the total bundle of rights without duration limit and with the freedom to use or dispose of the property as the owner sees fit.

Land Ownership

The legal right to possess, use, and control a designated area of land.

Life Estate

A property interest that gives a person the right to possess and use property for a time that is measured by his lifetime or that of another person.