joe owns 10% of an LLC that is treated as a partnersihp for tax purposes. His basis in the LLC is $50,000. The LLC has sigificant undistributed earnings. The LLC distributes $10,000 to Joe. How much t...
joe owns 10% of an LLC that is treated as a partnersihp for tax purposes. His basis in the LLC is $50,000. The LLC has sigificant undistributed earnings. The LLC distributes $10,000 to Joe.
How much taxable income does Joe report as a result of this distribution?
What is Joes tax basis in the LLC after the distribution?
Homework Answers
Joe owns the 10% of the LLC but only for the tax purposes that is treated as partnership.
As the LLC has a significant undistributed earnings of 50000 that distributed a 10000 to the Joe .
We required to given the effect of distributed amount of 10000 to the Joe on the amount of basis he has in the LLC.
There is no change in the the basis of having the ownership in the LLC.
Explanation for the above statement is as follows :-
The amount recieved by the Joe that is 10000 from the retained earnings of the company
It means the amount is treated as return for the 10% of ownership in the LLC.
in the question they didn't said anywhere that the amount is paying to the Joe for takeover of his complete share or a percentage of share from the LLC.
So there is no change in the basis of having ownership as per taxation also.
So there is no change in the tax basis of LLC after the distribution.
These are all the explanation required to solve the above given question.
I hope, all the above mentioned points and explanations are useful and helpful to you.
Thank you.
Add Answer to:
joe owns 10% of an LLC that is treated as a partnersihp for tax purposes. His basis in the LLC is $50,000. The LLC has sigificant undistributed earnings. The LLC distributes $10,000 to Joe. How much t...
Joe owns 10% of a corporation that is treated as a C corporation for tax purposes. His basis in the corporation is $50,000. The corporation has sigificant retained earnings. The corporation distribute...
Joe owns 10% of a corporation that is treated as a C corporation for tax purposes. His basis in the corporation is $50,000. The corporation has sigificant retained earnings. The corporation distributes $10,000 to Joe. How much taxable income does Joe report as a result of this distribution? What is Joes tax basis in the corporation after the distribution?
Joe owns 10% of a corporation that is treated as a C corporation for tax purposes....
Joe owns 10% of a corporation that is treated as a C corporation for tax purposes. His basis in the corporation is $50,000. The corporation has sigificant retained earnings. The corporation distributes $10,000 to Joe. How much taxable income does Joe report as a result of this distribution? What is Joes tax basis in the corporation after the distribution?
Interest is $50,000. His distribution includes cash of $5,000, inventory (FMV -$20,000; basis $10...
interest is $50,000. His distribution includes cash of $5,000, inventory (FMV -$20,000; basis $10,000), and equipment (FMV $2,000; basis $1,000). Sam's marginal tax rate is 24% and his long-term capital gains tax rate is 15%. 2. Sam receives a proportionate nonliquidating distribution when the basis of his partnership a. How much gain or loss does Sam recognize? Gain /Loss) b. What is Sam's tax liability/benefit on the distribution? (Liability /Benefit) c. What is Sam's basis in the inventory? d. What...
34. LO.3, 9, 14 Sam and Drew are equal partners in SD LLC formed on June 1 of the current year. S...
34. LO.3, 9, 14 Sam and Drew are equal partners in SD LLC formed on June 1 of the current year. Sam contributed land that he inherited from his uncle in 2012. Sam's uncle purchased the land in 1985 for $30,000. The land was worth $100,000 when Sam's uncle died. The fair market value of the land was $200,000 at the date it was contributed to the partnership. Drew has significant experience developing real estate. After the LLC is formed,...
At the beginning of the year, Myrna Corporation (a calendar year taxpayer) has E & P...
At the beginning of the year, Myrna Corporation (a calendar year taxpayer) has E & P of $32,000. The corporation generates no additional E & P during the year. On December 31, the corporation distributes $50,000 to its sole shareholder, Abby, whose stock basis is $10,000. How is the distribution treated for tax purposes? If an amount is zero, enter "0". As a result the distribution Abby has the following: Dividend income: ? Return of capital: ? Capital gain: ?...
Jack owns 100% stock of Verizon Inc. His basis in the stock is $24,000. Verizon had...
Jack owns 100% stock of Verizon Inc. His basis in the stock is $24,000. Verizon had $36,000 accumulated E&P. During the current year Verizon has negative E&P of $32,000. On April 1 Verizon distributed $40,000 in cash to Jack. Only July 1 Jack sold half his Verizon stock to Joanne for $50,000.On December 31 Verizon distributed $20,000 cash to Jack and $20,000 cash to Joanne. How is the $20,000 December distribution to Jack for tax purposes? a. $20,000 dividend b....
Problem 22-39 (LO. 8, 9) At the beginning of the tax year, Lizzie holds a $10,000...
Problem 22-39 (LO. 8, 9) At the beginning of the tax year, Lizzie holds a $10,000 stock basis as the sole shareholder of Spike, Inc., an S corporation. During the year, Spike reports the following: Net taxable income from sales $25,000 Net short-term capital loss (18,000) Cash distribution to Lizzie, 12/31 40,000 If an amount is zero, enter "0". 57,000 X. a. Determine Lizzie's stock basis at the end of the year. $ b. Of Lizzie's $40,000 cash distribution, $...
2.It is 2018 and Mark has the following investments. He owns 40% of Mav & Associates....
2.It is 2018 and Mark has the following investments. He owns 40% of Mav & Associates. Mav is an accounting firm and distributes to Mark $50,000. The firm has sales income of 1.600,000 and operating expenses of $1,100,000. The firm has property with an adjusted basis of $800,000 and paid W2 wages for the year of $500,000 Mark's is married and his taxable income lexcluding any income from Mav &Associates is $450,000. How will Mark's personal tax return be affected...
Accounting
Zane, an individual, owns all of the outstanding common stock in Sturdley Utilities Corporation. Zane purchased his Sturdley stock seven years ago and his basis is $8,000. At the beginning of the current year, Sturdley had $25,000 of accumulated earnings and profits and no current earnings and profits. Determine the tax consequences to Zane and Sturdley in each of the following alternative situations:(a) Sturdley distributes inventory ($20,000 fair market value; $11,000 basis) to Zane.(b) Same as (a), above, except that,...
3. Southern Corp., an S corporation, has no corporate E&P from years as a C corp....
3. Southern Corp., an S corporation, has no corporate E&P from years as a C corp. At the end of the year, it distributes a baseball court to its 50% shareholder, Jack, in an operating distribution. The fair market value of the court is $80,000, and its tax basis is $50,000. Mr. Jack's basis in his stock is $15,000. A. How much gain (loss) does Mr. Jack recognize as a result of the distribution (there may be more than one...
interest is $50,000. His distribution includes cash of $5,000, inventory (FMV -$20,000; basis $10,000), and equipment (FMV $2,000; basis $1,000). Sam's marginal tax rate is 24% and his long-term capital gains tax rate is 15%. 2. Sam receives a proportionate nonliquidating distribution when the basis of his partnership a. How much gain or loss does Sam recognize? Gain /Loss) b. What is Sam's tax liability/benefit on the distribution? (Liability /Benefit) c. What is Sam's basis in the inventory? d. What...
34. LO.3, 9, 14 Sam and Drew are equal partners in SD LLC formed on June 1 of the current year. Sam contributed land that he inherited from his uncle in 2012. Sam's uncle purchased the land in 1985 for $30,000. The land was worth $100,000 when Sam's uncle died. The fair market value of the land was $200,000 at the date it was contributed to the partnership. Drew has significant experience developing real estate. After the LLC is formed,...
Problem 22-39 (LO. 8, 9) At the beginning of the tax year, Lizzie holds a $10,000 stock basis as the sole shareholder of Spike, Inc., an S corporation. During the year, Spike reports the following: Net taxable income from sales $25,000 Net short-term capital loss (18,000) Cash distribution to Lizzie, 12/31 40,000 If an amount is zero, enter "0". 57,000 X. a. Determine Lizzie's stock basis at the end of the year. $ b. Of Lizzie's $40,000 cash distribution, $...
2.It is 2018 and Mark has the following investments. He owns 40% of Mav & Associates. Mav is an accounting firm and distributes to Mark $50,000. The firm has sales income of 1.600,000 and operating expenses of $1,100,000. The firm has property with an adjusted basis of $800,000 and paid W2 wages for the year of $500,000 Mark's is married and his taxable income lexcluding any income from Mav &Associates is $450,000. How will Mark's personal tax return be affected...
3. Southern Corp., an S corporation, has no corporate E&P from years as a C corp. At the end of the year, it distributes a baseball court to its 50% shareholder, Jack, in an operating distribution. The fair market value of the court is $80,000, and its tax basis is $50,000. Mr. Jack's basis in his stock is $15,000. A. How much gain (loss) does Mr. Jack recognize as a result of the distribution (there may be more than one...
Most questions answered within 3 hours.
-
IN PYTHON ONLY !! Program 2: Re-work
program #5 (WeeklyHours) from the previous assignment such that...
asked 5 minutes ago -
The average length of time between arrivals at a turnpike
toll-booth is 26 seconds. What is...
asked 1 hour ago -
(a) A piston at 6.1 atm contains a gas that occupies a volume of
3.5 L....
asked 2 hours ago -
Please answer true or false. Words
cannot be changed or added in to make it true...
asked 2 hours ago -
An empty test tube weighs 15.923 grams. Then,
MgCl2•6H2O is added into the test tube. After...
asked 2 hours ago -
Assume memory access is 10 units of time and disk access is
10000 units of time....
asked 3 hours ago -
1. Are all good samples random?
2. Magazines often report surveys giving statistics such as “63%...
asked 3 hours ago -
Under all the various types of market structures, firms
must eventually earn some economic profits for...
asked 3 hours ago -
Consider the following fitness regime for a single locus trait
with two co-dominant alleles: w11 =...
asked 3 hours ago -
A large cable company reports the following.
80% of its customers subscribe to its cable TV...
asked 3 hours ago -
Please answer the question in brief.
Discuss the role of ERP in organizations. Are ERP tools...
asked 3 hours ago -
Discuss the pros and cons of collaborative software such
as SameTime. Does it increase productivity? What...
asked 3 hours ago