In general, what circumstance exist when a corporation is making liquidating distribution compared to a non-liquidating distribution?
The distributions, property and cash, are categorised mainly into - liquidating or non-liquidating distribution. These two types of distributions have to be differently in taxation. In general, when the corporation makes a liquidating distribution the circumstances which occur include either:
-- when a partnership liquidates itself and afterwards distributes for the property to its partners
-- when a partnership which is an ongoing redeems the interest of one of its partners; and often it occurs when a partner retires from the partnership, or when interest of deceased partner’s is liquidated
In general, what circumstance exist when a corporation is making liquidating distribution compared to a non-liquidating...
True or False: If a partner receives a non-liquidating cash distribution, the partner will recognize a loss if the cash distributed is less than the partner's outside basis at the time of the distribution.
26. Identify which of the following statements is true. A) A liquidating distribution of property other than a disqualified property that is made ratably to all shareholders (based on their stockholdings) will permit the recognition of loss on the portion of the distribution that is made to a related person. B) A subsidiary corporation can recognize losses on distributions to either the parent corporation or minority shareholders in a Sec. 332 liquidation. C) Section 336 prevents recognition of a loss...
Which of the following is an advantage of a general partnership when compared to a corporation? a.Creditors to a partnership cannot attach personal assets of partners. b.A partnership is more likely to have a positive net income. c.The partnership usually hires professional managers. d.The partnership is relatively inexpensive to organize.
Which of the following is an advantage of a general partnership when compared to a corporation? a.The partnership usually hires professional managers. b.The partnership is relatively inexpensive to organize. c.A partnership is more likely to have a positive net income. d.Creditors to a partnership cannot attach personal assets of partners.
Trolley Corp., which had earnings and profits of $500,000, made a non-liquidating distribution of property to its shareholders in Year 1 as a dividend in kind. This property, which had an adjusted basis of $20,000 and a fair market value of $30,000 at the date of distribution, did not constitute assets used in the active conduct of Trolley’s business. How much gain did Trolley recognize on this distribution?
8. A corporation declared a dividend, a portion of which was liquidating. How would this distribution affect each of the following? Additional Paid-in Capital a. Decrease b. Decrease c. No effect d. No effect Retained Earnings No effect Decrease Decrease No effect
3. In a liquidating distribution, Business Corporation distributes land to its shareholder Ferrell (an individual). Business Corporation acquired the land in a §351 transfer 6 year ago from Ferrell. At the time of the transfer into the Corporation, the land had basis of $700,000 and FMV of $1,000,000. At the time of distribution to Ferrell, the FMV of the land is $500,000. Ferrell owns 40% of the corporation and his stock basis is $150,000. Ferrell’s sister owns the remaining 60%...
Clementine is a 12% partner of West Partnership. On May 12, 2018, Clementine receives a non-liquidating distribution of property with FMV of $20,000 (partnership's basis in the property is $18,000). Right before the distribution, Clementine's outside basis in West Partnership is $24,000, including her tax basis in capital of $14,000 and her share of partnership liabilities of $10,000. What is Clementine's basis in the property received? a $2,160 b $2,400 c $14,000 d $18,000 e $20,000
Clementine is a 12%...
How does a S corporation evade double taxation on capital gains compared to a general corporation?
Thanks for your HELP!!! : ) 23. Identify which of the following statements is true. A) In general, a noncorporate shareholder that receives a distribution in complete liquidation of the liquidating corporation recognizes his or her entire realized gain as a capital gain. B) The basis for nonmoney property received by a noncorporate shareholder as part of a liquidating distribution is the same as its basis on the books of the liquidating corporation. C) The liquidating corporation does not recognize...