ZuoTi.Pro
Question

XYZ Corporation distributed to its shareholders a total of $30,000 in cash plus property that had...

XYZ Corporation distributed to its shareholders a total of $30,000 in cash plus property that had a fair market value of $80,000 and a basis of $60,000. The corporation’s earnings and profits were $100,000 on the last day of the year in which the distribution was made after taking into effect the impact on the corporation’s earning and profits of the gain recognized on the distribution (but before reducing earnings and profits by the fair market value of the distribution). How much was the total dividend income received by the shareholders as a result of the distributions made by XYZ Corporation?

Group of answer choices

$0

$90,000

$100,000

$110,000

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

The answer is $100,000.

Corporation's earnings and profits = $100,000

Fair value of distribution = $30,000 + $80,000 = $110,000

Carrying value of distribution = $30,000 + $60,000 = $90,000

Total dividend income received by shareholders as a result of the distributions made by XYZ Corporation is Lower of

Corporation's earnings and profits $110,000 Or,

Fair value of distribution $100,000

Therefore the answer is $100,000.

0 0
Add a comment
Know the answer?
Add Answer to:
XYZ Corporation distributed to its shareholders a total of $30,000 in cash plus property that had...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • — 3. In the current year, Warbler Corporation (E&P of $250,000) made the following property distributions...

    — 3. In the current year, Warbler Corporation (E&P of $250,000) made the following property distributions to its shareholders (all corporations): Fair Market Adjusted Basis Value Pink Corporation stock (held for investment) $150,000 $120,000 Non-LIFO inventory 80,000 110,000 Warbler Corporation is not a member of a controlled group. As a result of the distribution: a. The shareholders have dividend income of $200,000. b. The shareholders have dividend income of $260,000. c. Warbler has a recognized gain of $30,000 and a...

  • 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...

  • Z-Sisters Corporation has one class of voting common stock, of which 1,000 shares are issued and...

    Z-Sisters Corporation has one class of voting common stock, of which 1,000 shares are issued and outstanding. The shares are owned as follows: Shares Lourdes Vick 400 Anita Vick (Lourdes’s daughter) 200 Liz Vick (Lourdes’s daughter) 200 Cat Labrillazo (unrelated) 200 Total 1000 Z-Sisters Corporation has current E&P of $300,000 for this year and accumulated E&P at January 1 of this year of $500,000. During this year, the corporation made the following distributions to its shareholders: 03/31: Paid a dividend...

  • Exercise 19-25 (LO. 5) Quinlan has ample E & P to cover any distributions made during...

    Exercise 19-25 (LO. 5) Quinlan has ample E & P to cover any distributions made during the year. One distribution made to a shareholder consists of a property with an adjusted basis of $150,000 and a fair market value of $90,000 What are the tax consequences of this distribution to Quinlan? If an amount is zero, enter "O" As a result of the distribution, Quinlan Corporation has a realized lossof The shareholder received property with a basis of of which...

  • At the beginning of the year, Purple, Inc., an S corporation, had $100,000 in its AAA,...

    At the beginning of the year, Purple, Inc., an S corporation, had $100,000 in its AAA, and $50,000 of earnings and profits from prior C corporation years.  During the year, Purple earned $60,000 of ordinary income and paid $200,000 in distributions to its shareholders.  Assume that White owns 25% of Purple, her basis in Purple at the beginning of the year is $30,000, and her share of the distribution was $50,000.  How much, if any, of the distribution is taxable to White as...

  • 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?

  • BB Co., Inc. issues 1 Million of it $5 par value stock plus $5,000,000 in cash...

    BB Co., Inc. issues 1 Million of it $5 par value stock plus $5,000,000 in cash to acquire 100% of the voting common stock in DD Corporation. On the date of acquisition BB stock is trading at $40 per share. BB will account for this business combination as a stock acquisition. Balance sheet information ($ in thousands) as of the date of acquisition is as follows: BB Co., Inc. Book Values Dr (Cr) DD Corp. Book Values Dr (Cr) Fair...

  • Venus Corporation purchases 70% of the common stock of Starnes Company for $700,000. At the time...

    Venus Corporation purchases 70% of the common stock of Starnes Company for $700,000. At the time of purchase, Starnes has the following balance sheet: Starnes Company Balance Sheet December 31, 2019 90,000 300,000 Assets Cash equivalents Inventory Land Building (net) Equipment (net) Total Assets Liabilities and Equity 110,000 Accounts Payable 200,000 Bonds Payable 80,000 Stockholder's Equity 400,000 Common Stock ($5 par) 210,000 Paid-in Capital in excess of par Retained Earnings 1,000,000 Total Liabilities and Equity 100,000 160,000 350,000 1,000,000 The...

  • Question 34 20-34 Cash and Property Dividends. X Corporation is owned by T (an individual) and...

    Question 34 20-34 Cash and Property Dividends. X Corporation is owned by T (an individual) and Z Corporation. X Corporation declared and paid the following dividends: $12.000 cash and a printing press with a fair market value of $12,000 and an adjusted basis of $5,000. X Corporation's earnings and profits exceed $25,000. Consider each al ternative independently a. If Z Corporation received the cash and T received the printing press, how much dividend income would each report? b. If T...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT