Money, Inc., a calendar year S corporation, has two unrelated shareholders, each owning 50% of the stock. Both shareholders have a $400,000 stock basis as of January 1, and Money has AAA of $300,000 and AEP of $600,000. During the year, Money has operating income of $100,000. At the end of the year, Money distributes securities worth $1 million, with an adjusted basis of $800,000. Determine the tax effects of these transactions.
Answer to relevant QuestionsWhich of the following can be a shareholder of an S corporation? a. Resident alien. b. Partnership. c. IRA. d. Estate. Cougar, Inc., is a calendar year S corporation. Cougar’s Form 1120S shows nonseparately stated ordinary income of $80,000 for the year. Johnny owns 40% of the Cougar stock throughout the year. The following information is ...One of your clients, Texas, Inc., is considering electing S status. Both of Texas's equal shareholders paid $30,000 for their stock. As of the beginning of 2013, Texas's Subchapter C NOL carryforward is $110,000. Its taxable ...FoldIt, a U.S. business, paid income taxes to Mexico relative to profitable sales of shipping boxes it made in that country. Can it claim a deduction for these taxes in computing U.S. taxable income? A tax credit? Both? ...Harold, Inc., a domestic corporation, earned $500,000 from foreign manufacturing activities on which it paid $150,000 of foreign income taxes. Harold's foreign sales income is taxed at a 45% foreign tax rate. Both sales and ...
Post your question