Question

ListCo reports the following income for the current tax year.
Operations ............. $92,000
Tax-exempt interest income ...... 19,000
Long-term capital gain ......... 60,000
ListCo holds earnings and profits (AAA for an S corporation) of $900,000 at the beginning of the year. Then ListCo distributes $200,000 in total to the owners.
a. Calculate the taxable income if ListCo is
(1) A C corporation
(2) An S corporation.
b. Determine the effect of the distribution on the shareholders if ListCo is
(1) A C corporation
(2) An S corporation.


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  • CreatedMay 25, 2015
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