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3. Purple Corporation makes a property distribution to its sole shareholder, Paul. The property distributed is...
Z Inc. distributed a parcel of land to Zeke, the sole shareholder. The land had a fair value of $30,000 and a basis of $50,000. Prior to considering this distribution, Z had accumulated E&P of $0 and current earnings and profits of $20,000. How much of the distribution will be a taxable dividend? What is the total remaining E&P after this distribution?
Mantis, the sole shareholder of Xenomorph Corporation, sold her stock to Drax on July 1. Mantis’ stock basis at the beginning of the year was $150,000. Xenomorph made a $70,000 cash distribution to Mantis immediately before the sale, while Drax received a $140,000 cash distribution from Xenomorph on November 1. As of the beginning of the current year, Xenomorph had $35,000 in accumulated E & P, while current E & P (before distributions) was $75,000. (20 points) How much of...
Mantis, the sole shareholder of Xenomorph Corporation, sold her stock to Drax on July Mantis’ stock basis at the beginning of the year was $150,000. Xenomorph made a $70,000 cash distribution to Mantis immediately before the sale, while Drax received a $140,000 cash distribution from Xenomorph on November 1. As of the beginning of the current year, Xenomorph had $35,000 in accumulated E & P, while current E & P (before distributions) was $75,000. (20 points) How much of the...
QUESTION 7 A corporation sells property (basis of $175,000) to its sole shareholder for $125,000, the fair market value of the property. With respect to the sale, The shareholder has a basis of S175,000 in the property. The corporation has a tax loss of S50,000. The corporation does not recognize a tax loss but reduces its E & P account $50,000. The shareholder has a constructive dividend of $50,000. None of the above QUESTION 8 Assume taxable income is the...
Jane is the sole shareholder of Buttons, Inc. Buttons has accumulated earnings and profits (E & P) of $65,000 at the beginning of the current year. The current E & P is $35,000. Buttons pays out a property distribution to Jane during the current year with an FMV of $150,000 and an adjusted basis of $130,000. How much is taxable dividend to Jane? a. $35,000 b. $100,000 c. $120,000 d. $150,000 Please show your work.
ASSUME ALL CORPORATIONS ARE C CORPORATIONS Corporation X-a C Corporation-distributed the following to its sole shareholder-John-during the year: Inventory-cost/basis of $5,000 with a fair market value of $9,000. The following facts are provided: Corp X has accumulated E and P of $ 12, 000 and current E and P of $2,000 - without regard to this distribution. Corp X's tax rate is 21 percent. John has a basis in the corporate stock of $23,000. 1. What are the tax effects...
ASSUME ALL CORPORATIONS ARE C CORPORATIONS Corporation X-a C Corporation-distributed the following to its sole shareholder-John-during the year: Inventory-cost/basis of $5,000 with a fair market value of $9,000. The following facts are provided: Corp X has accumulated E and P of $ 12, 000 and current E and P of $2,000 - without regard to this distribution. Corp X's tax rate is 21 percent. John has a basis in the corporate stock of $23,000. 1. What are the tax effects...
3. Corporation K distributed a parcel of real estate to a shareholder that had an adjusted basis to the corporation of $50,000 and a fair market value of $75,000. The property was subject to a mortgage of $80,000, which was assumed by the shareholder. What is Corporation K's recognized gain (or loss) on the distribution to the shareholder? A. $(5,000) B. $0 C. $25,000 D. $30,000 bent used in its business to its sole shareholder Mr. B for $13,000.
Maggie, the sole shareholder, had a basis of $60,000 in the stock of Livingston Corporation which she sold to Ruth on July 31, 2020 for $140,000. Livingston Corporation had positive Accumulated Earnings And Profits (E&P) of $70,000 on January 1, 2020 and positive Current Earnings And Profits (E&P) for 2020 of $50,000. During 2020, Livingston Corporation made the following distributions: $100,000 Cash to Maggie on July 1, 2020 and $100,000 Cash to Ruth on December 31, 2020. Ruth will have...
Petrel Corporation has accumulated E & P of $85,000 at the beginning of the year. Its current-year taxable income is $320,000. On December 31, Petrel distributed business property (land: fair market value of $140,000, adjusted basis of $290,000) to Juan, its sole shareholder. Juan assumes a $70,000 liability on the property. Included in the determination of Petrel's current taxable income is $16,000 of income recognized from an installment sale in a previous year. In addition, the corporation incurred a Federal...