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3. Corporation K distributed a parcel of real estate to a shareholder that had an adjusted...
Ben Corp distributes a parcel of land to its sole shareholder sera. The fair value of...
Ben Corp distributes a parcel of land to its sole shareholder sera. The fair value of the land is $30,000. The basis of the land to the corporation is $25,000. The land has a mortgage in the amount of $28,000 that is assumed by sera. What are the consequences to sera and to Ben Corporation. Assume that the earning and profits are $300,000.
The Beta Corporation owns a building with a basis of $20,000 that is subject to a...
The Beta Corporation owns a building with a basis of $20,000 that is subject to a debt of $80,000. The FMV of the building is $50,000. Beta distributes the property in a nonliquidating distribution (along with the debt) to Ben, its sole shareholder. What is Ben’s basis in the building received from Beta in the distribution? a. $80,000. b. $50,000. c. zero d. $30,000. e. none of the above. The Beta Corporation owns a building with a basis of $20,000...
Z Inc. distributed a parcel of land to Zeke, the sole shareholder. The land had a...
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?
A U.S. individual investor held a real estate asset (a parcel of land) that that was...
A U.S. individual investor held a real estate asset (a parcel of land) that that was purchased for $10,000,000, then held for 10 years. Now, the individual will sell it for $30,000,000. a) Compute the tax on the sale if the land is held directly by the investor b) Compute the tax on the sale to the investor if land is held in a corporation (consider both entity tax and tax on the distributions) c) Compute the tax on the...
ABC Inc. had current earnings and profits of $50,000 when it distributed to an individual shareholder...
ABC Inc. had current earnings and profits of $50,000 when it distributed to an individual shareholder land that the corporation held as an investment. On the date the land was distributed, ABC Inc.’s adjusted basis in the land was $10,000, the fair market value of the land was $50,000, and the land was encumbered by a $30,000 mortgage, which liability was assumed by the shareholder. There were no other transactions that might affect ABC Inc.’s earnings and profits for the...
Jack transferred property with an adjusted basis of $45,000 to JKL Corporation. There was a $35,000...
Jack transferred property with an adjusted basis of $45,000 to JKL Corporation. There was a $35,000 mortgage on the property. In exchange for the transferred property, Jack received stock with a fair market value of $65,000 and $25,000 cash, and the corporation assumed the liability on the property. How much gain is recognized by Jack? A. $0 B. $20,000 C. $25,000 D. $35,000
Lou Corp. distributed land worth $50,000 to its sole shareholder. The land had basis of $70,000...
Lou Corp. distributed land worth $50,000 to its sole shareholder. The land had basis of $70,000 and was subject to a mortgage of $30,000. Lou’s E&P before any adjustments for the distribution is $100,000. How much is the net decrease to Lou’s E&P?
During the current year, Sparrow Corporation, a calendar year C corporation, had operating income of $425,000,...
During the current year, Sparrow Corporation, a calendar year C corporation, had operating income of $425,000, operating expenses of $280,000, a short-term capital loss of $10,000, and a long-term capital gain of $25,00 w much is Sparrow's income tax liability for the year? $32,700 $33,600 $45,650 $62,400 1. Dahlia Corp. was organized and commenced Operations in 1930. At December 1, 2020, Dahlia had accumulated earnings and profits of $9,000 before a dividend declaration and distribution, On Decemb 2 020, Dahlia...
3. Purple Corporation makes a property distribution to its sole shareholder, Paul. The property distributed is...
3. Purple Corporation makes a property distribution to its sole shareholder, Paul. The property distributed is a house (fair market value of $189,000; basis of $154,000) Before considering the consequences of the distribution, Purple's current E & P is $35,000 and its accumulated E & P is $140,000. Purple makes no other distributions during the current year. What is Purple's taxable gain on the distribution of the house, if any?
18. Identify which of the following statements is true. A) With limited exceptions, a loss can...
18. Identify which of the following statements is true. A) With limited exceptions, a loss can be recognized by a liquidating corporation when it makes a liquidating distribution of property that has declined in value. B) When computing the corporate-level gain on a liquidating distribution, the FMV of the property cannot exceed the liability assumed or acquired by the shareholder. C) The FMV of property distributed by a liquidating corporation can be less than the amount of the liability assumed...
A U.S. individual investor held a real estate asset (a parcel of land) that that was purchased for $10,000,000, then held for 10 years. Now, the individual will sell it for $30,000,000. a) Compute the tax on the sale if the land is held directly by the investor b) Compute the tax on the sale to the investor if land is held in a corporation (consider both entity tax and tax on the distributions) c) Compute the tax on the...
During the current year, Sparrow Corporation, a calendar year C corporation, had operating income of $425,000, operating expenses of $280,000, a short-term capital loss of $10,000, and a long-term capital gain of $25,00 w much is Sparrow's income tax liability for the year? $32,700 $33,600 $45,650 $62,400 1. Dahlia Corp. was organized and commenced Operations in 1930. At December 1, 2020, Dahlia had accumulated earnings and profits of $9,000 before a dividend declaration and distribution, On Decemb 2 020, Dahlia...
3. Purple Corporation makes a property distribution to its sole shareholder, Paul. The property distributed is a house (fair market value of $189,000; basis of $154,000) Before considering the consequences of the distribution, Purple's current E & P is $35,000 and its accumulated E & P is $140,000. Purple makes no other distributions during the current year. What is Purple's taxable gain on the distribution of the house, if any?
18. Identify which of the following statements is true. A) With limited exceptions, a loss can be recognized by a liquidating corporation when it makes a liquidating distribution of property that has declined in value. B) When computing the corporate-level gain on a liquidating distribution, the FMV of the property cannot exceed the liability assumed or acquired by the shareholder. C) The FMV of property distributed by a liquidating corporation can be less than the amount of the liability assumed...
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