Homework Answers
In the given case as the Gold Corporation is about to face stress condition due to heavy loss of an asset amounting of $2 million, hence, they need to appropriate the accumulated E & P which is of $2 million as of January 1 and there by they can distribute the dividend which is of $9,00,000.
Otherwise, Gold corporation can deffer the dividend or reduce the dividend by maintaining the current stock price so that at least capital of the stake holder should not be hampered.
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Gold Corporation has accumulated E&P of $2 million as of January 1 of the current year....
Your client, Heron Corporation, has a deficit in accumulated E & P of $300,000. Starting this...
Your client, Heron Corporation, has a deficit in accumulated E & P of $300,000. Starting this year, it expects to generate annual E & P of $150,000 for the next four years and would like to distribute this amount to its shareholders. How should Heron Corporation distribute the $600,000 over the four-year period to provide the least amount of dividend income to its shareholders (all individuals)? In a letter to your client, make appropriate suggestions on how this should be...
On January 1, Scorpio Corporation (a calendar year taxpayer) has accumulated E & P of $200,000....
On January 1, Scorpio Corporation (a calendar year taxpayer) has accumulated E & P of $200,000. During the year, Scorpio incurs a net loss of $300,000 from operations that accrues ratably. On June 30, Scorpio distributes $115,000 to Laura, its sole shareholder. How much of the $115,000 represents ordinary dividend income to Laura? $100,000 $0 $50,000 $115,000 None of the above.
On January 1 of the current year, Rhondell Corporation has accumulated E & P of $66,000....
On January 1 of the current year, Rhondell Corporation has accumulated E & P of $66,000. Current E & P for the year is $198,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $105,600 ($52,800 to Elizabeth and $52,800 to Jonathan) on April 30 and...
On January 1 of the current year, Rhondell Corporation has accumulated E & P of $180,000....
On January 1 of the current year, Rhondell Corporation has accumulated E & P of $180,000. Current E & P for the year is $540,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $288,000 ($144,000 to Elizabeth and $144,000 to Jonathan) on April 30 and...
On January 1, Tulip Corporation (a calendar year taxpayer) has accumulated E & P of $300,000. Its current E &am...
On January 1, Tulip Corporation (a calendar year taxpayer) has accumulated E & P of $300,000. Its current E & P for the year is $90,000 (before considering dividend distributions). During the year, Tulip distributes $600,000 ($450,000 to Anne on April 1, $150,000 To Tom on August 1) to its two shareholders, Anne and Tom. Anne has a basis in her stock of $65,000, while Tom's basis is $120,000. What is the effect of the distribution by Tulip Corporation on...
On January 1 of the current year, Rhondell Corporation has accumulated E & P of $98,000....
On January 1 of the current year, Rhondell Corporation has accumulated E & P of $98,000. Current E&P for the year is $294,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $156,800 ($78,400 to Elizabeth and $78,400 to Jonathan) on April 30 and a total...
X Inc. has beginning accumulated E&P of $10,000 and current E&P deficit for the year of...
X Inc. has beginning accumulated E&P of $10,000 and current E&P deficit for the year of ($9,000). The corporation makes a cash distribution on the last day of the tax year of $7,000 to the sole shareholder. The shareholders stock basis before the distribution was $4,000. find the following: 1. amount of taxable dividend 2. non-taxable return of capital 3. recognized capital gain
16. LO.3 On January 1 of the current year, Rhondell Corporation has accumulated E&P of $13,000....
16. LO.3 On January 1 of the current year, Rhondell Corporation has accumulated E&P of $13,000. Current E&P for the year is $84,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $42,000 ($21,000 to Elizabeth and $21,000 to Jonathan) on April 30 and a total...
Assume a calendar-year corporation has a deficit in current E&P of ($100) and positive accumulated E&P...
Assume a calendar-year corporation has a deficit in current E&P of ($100) and positive accumulated E&P of $100. Under this circumstance, a cash distribution of $100 to the corporation’s sole shareholder on June 30 will not be treated as a dividend because total E&P at December 31 is $0. True or false? Explain.
12. Robin Corporation, a calendar year taxpayer, has a deficit in current E & P of...
12. Robin Corporation, a calendar year taxpayer, has a deficit in current E & P of $200,000 and a $580,000 positive balance in accumulated E & P. If Robin determines that a $700,000 distribution to its shareholders is appropriate at some point during the year, a.)What is the maximum amount of the distribution that could potentially be treated as a dividend and what date would that distribution need to be made? b.) Refer to the facts above, assume that the...
On January 1, Tulip Corporation (a calendar year taxpayer) has accumulated E & P of $300,000. Its current E & P for the year is $90,000 (before considering dividend distributions). During the year, Tulip distributes $600,000 ($450,000 to Anne on April 1, $150,000 To Tom on August 1) to its two shareholders, Anne and Tom. Anne has a basis in her stock of $65,000, while Tom's basis is $120,000. What is the effect of the distribution by Tulip Corporation on...
On January 1 of the current year, Rhondell Corporation has accumulated E & P of $98,000. Current E&P for the year is $294,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $156,800 ($78,400 to Elizabeth and $78,400 to Jonathan) on April 30 and a total...
16. LO.3 On January 1 of the current year, Rhondell Corporation has accumulated E&P of $13,000. Current E&P for the year is $84,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $42,000 ($21,000 to Elizabeth and $21,000 to Jonathan) on April 30 and a total...
12. Robin Corporation, a calendar year taxpayer, has a deficit in current E & P of $200,000 and a $580,000 positive balance in accumulated E & P. If Robin determines that a $700,000 distribution to its shareholders is appropriate at some point during the year, a.)What is the maximum amount of the distribution that could potentially be treated as a dividend and what date would that distribution need to be made? b.) Refer to the facts above, assume that the...
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