Jumper Inc., which has a 34 percent marginal tax rate, owns 40 percent of the stock of
Question:
Jumper Inc., which has a 34 percent marginal tax rate, owns 40 percent of the stock of a CFC. At the beginning of 2016, Jumper's basis in its stock was $660,000. The CFC's 2016 income was $1 million, $800,000 of which was subpart F income. The CFC paid no foreign income tax and distributed no dividends.
a. Compute Jumper's 2016 constructive dividend and related tax cost as a result of its investment in the CFC.
b. Compute Jumper's basis in its CFC stock at the beginning of 2017?
DividendA dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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a Jumper must recognize a 320000 constructive dividend from the CFC 40 8000...View the full answer
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Related Book For 
Principles Of Taxation For Business And Investment Planning 2018
ISBN: 9781259713729
21st Edition
Authors: Sally Jones, Shelley C. Rhoades Catanach, Sandra R Callaghan
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